Investing in Bethlehem PA

[Erick Paley]

Hi Everyone!

I am a new investor to the Bethlehem PA market. I’m looking at an opportunity on the south side of the river in Bethlehem. Does anyone have any insight or knowledge into the area? Crime, quality of tenant, time spent vacant, chances of the area becoming revitalized, etc. any and all insight is much appreciated!!

[David Ribardo]

@Erick Paley Welcome to the forum. The south side of Bethlehem has plenty of investor activity. Quality of tenant and time spent vacant are more directly related to the skill of you or property manager than the location. There is a large number of perspective tenants, and a low amount of rental inventory in the area. This will give you plenty of options when filling your units, so make sure you are patient and place one that is fully qualified. This applies to the entire Lehigh Valley.

Chances of the area becoming "revitalized" is a pretty open ended question. There are strong economic drivers, and the market appreciated 24% last year (2 year trailing average sale price of 2-unit was $124,500, past year average sale price of 2-unit was $163,500). The casino, steel stacks, and other establishments in the area have brought out of town money which has seen some good shops and places to eat pop up. The big opportunity here is Lehigh University student housing. For example, one of my deals was for a 4/2 SFH that was $120k after renovation and refinance. This brings in a gross of $27,600 per year in rent, and has been stable throughout COVID. I don't see any major changes taking place in the short time, but the outside investor demand has been driving price increases resulting in very nice appreciation.