Vacant Duplex in Pittsburgh

[Jonathan Buerkert]

I began rehabbing a duplex last year in McKees Rocks, PA. I finally finished the job this year and completed all the inspections with the borough. I've been marketing the rental with an agent at ERA Showcase Realty since May but I still don't have any renters lined up. Is there anything more I can do to find renters even though I'm out of the area?

Also, I began this project to ultimately sell the property. Once the rental is occupied and has cash flow, what's the best way to find a buyer?

Please advise.
JonB

[Jeff S.]

Ditto. Sounds like you need another agent. Is he an experienced property manager or just a real estate sales person? I shudder to think what will happen if the property is rented and you have tenant problems. The first thing I would do is conduct a rent survey.

It looks like McKees Rocks is a suburb of Pittsburg, so there should be ample listings on Craigslist to get an idea of rents. Alternately, you can often find rents in the online edition of the local newspapers (you do read the local newspapers in the area you invest, don’t you?).

Find out who runs the local real estate club by Googling "Real estate clubs in Pittsburg" and also looking some clubs up on Meetup. Ask this person if he can refer you to some local rental investors and call them. They too can give you an idea of rents, and more importantly, the names of competent property managers.

Call the property managers and discuss rents again, along with the possibility of using them to manage your duplex. Ideally, you’ll find a property manager used to working with out-of-town investors. Hopefully, you have other properties in the area. This makes you a little more appealing.

I know you don’t want to hear this but no matter how many rentals there are in the area, I guarantee you can rent your property tomorrow for $1 per month. Three months vacant is way too long. This is just going to boil down to what the market will bear, how your property shows, and how competent your manager is. Someone dropped the ball here.

Getting on an airplane is the best way to do all of the above, but not required. How motivated are you?

I don’t know what your exit strategies were but I can think of three for you:

First, your property will be more appealing to an investor if it’s fully rented and actually cash flowing. Sales price will be a function of neighborhood comps as well as ROI. As you might have found, out of town investors have a tendency to overpay, based on cash flow and not comps. With the help of your new and hopefully competent manager, market your property to out of town investors. In addition, the local contacts you made above might know some interested local investors.

Two, rent one unit and market to owner occupants looking to live in one unit and enjoy the cash flow from the other – maybe a young couple starting out with limited cash.

Three, hold for your own cash flow and sell in years to come as the market maybe picks up. This is not really an exit strategy, but your money is sunk. Anything you can get is better than nothing and is hopefully an adequate return.

Above all, get some competent help.

Jeff