What's considered a 'good' cash flow in Pittsburgh?

Question

Hi! I'm just getting started in real estate and am currently working with my realtor to get my first house hacking property, possibly a 3-4 multi family home in Pittsburgh. My goal would be primarily cash flow rather than appreciation unless there's a property with a good chance of flip.

So my plan is to house hack for few months and then move out so that it can generate some cash flow.. (I will be moving to different states) While I was chugging number for some of the properties that I'm looking at, I came to wonder what would be considered as a good, decent cash flow once I move out. With 5% down payments and all the expenses deducted, there seem to have close negative/only around $100 cash flow each month. Is this still considered ok? It passes the 1% rule, but it barely does. What should I prioritize when investing in real estate? Any advice would be helpful as I'm just starting out and am very excited for this whole journey ahead!

Dennis Bragg · Answer

Hi Yooni,

Congrats on taking the leap into real estate investing! House hacking is a fantastic way to start building wealth while minimizing risk. Back when I started investing, I found it helpful to prioritize understanding the nuances of each market, and Pittsburgh is a gem for steady cash flow opportunities.

Here’s the deal: a $100 monthly cash flow might seem underwhelming, but context matters. If you’ve got strong tenant demand, proximity to top employers, or even access to public transit, you’re laying a solid foundation. Plus, small cash flow can compound over time. One of my early properties barely broke even, but after a couple of years, rent hikes and expense optimization turned it into a strong performer.

For cash flow benchmarks, I usually aim for $200-$300 per unit, but your situation.. house hacking.. offers unique benefits like reduced living expenses and quicker equity buildup. One friend of mine house hacked a duplex in Pittsburgh, initially making just $75/month after expenses. Today, she’s cash flowing $400/month per unit, thanks to strategic updates and rent adjustments. That also happens here in San Diego all the time, btw!

Remember to account for potential surprises. Set aside reserves for unexpected repairs or vacancies. Also, neighborhoods matter. Areas like Lawrenceville and East Liberty have undergone huge transformations.. it’s worth exploring how those shifts could affect your property’s future value.

What’s your take? Any properties catching your eye? I’m curious to hear how you’re narrowing down neighborhoods.

Wale Lawal · Answer

@Yooni Choi

For a first property, $100/month in cash flow might not be ideal, but it’s acceptable, especially with a house hack. Over time, rents may increase, improving your cash flow, and you’ll gain equity and valuable experience managing tenants and property operations. Prioritize stable cash flow, good location, and manageable property condition, while considering strategies like gradual rent increases, expense reduction, and value-add improvements to enhance returns. Your first deal is about learning, so focus on the fundamentals and think long-term, this is just the beginning of building wealth!

Good luck!

What's considered a 'good' cash flow in Pittsburgh?

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