2BR or 3BR Townhouse?

Question

We're thinking about buying a 3BR townhouse in Pittsburgh (Cranberry area), PA as rental property.

Market rent seems to be ~$1700. I'm a bit hesitant, because if I ask a tenant to pay $1700, wouldn't he/she prefer to just buy a house, and pay the same amount of money for mortgage? (I guess I can ask the same question for all the renters out there)

For other investors in the Pittsburgh area, is it easier to rent out a 2 or 3BR townhouse?

TIA

Kevin Huang · Answer

thank you all that replied!

Brant Richardson · Answer

The rent in my investment is more than 3x the cost of the mortgage.  It blows me away that renting would be something a person would consider there. Coming up with a down payment and qualifying for a loan are a real barrier for people.

Bill Scott · Answer

My son paid $2000 for a 2br/2bath in Shady Side.  I think it's a trendier neighborhood than where you're at, but the amount doesn't seem to be a problem.

Jerry Kisasonak · Answer

Post a ghost ad on Craigslist for this property. Include a picture(s) if at all possible - even if just of a similar property. See how many inquires you get. Post the ad for several days. This will give you some indication of the demand. Cranberry is a strong market with plenty of high paying jobs in the area. Just because someone can afford to buy a house doesn't mean that they want to. I would also pull rent comps up on rentometer.com. If the 1,700 is in line with their suggested rents you're probably good to go.

Joe Pitrolo · Answer

Check with some realtors or property management people to see if there is a strong demand in your particular area for renters.

If $1700 is market rent and market isn't saturated, the prince shouldn't be a problem and renters typically are renting because they don't want to commit to a mortgage and/or may not qualify or need to move in a few years.

With a TH, I would also consider that you probably have a HOA to deal with, HOA dues which can vary and the HOA may have rules about who or if you can rent, need to check the covenants and bi-laws.

As to 2 or 3, I think any can be successful, but you can charge a lot more for a 3 and may have higher demand.