Anyone in Scranton Pa?

Question

Marc Winter · Answer

@Chris Engler,

@Chris K. is correct--property values and rentals are a bit higher in Scranton than in Wilkes-Barre.  As property managers we get calls every day from OOS investors.  Prices are VERY low compared to the major city areas, but more importantaly, the ROI is much higher on cash flow (see my blog post).  But Scranton and surrounding towns are not an 'appreciation play'.  This is, IMHO a buy/hold/cashflow play.

Chris K:  Scranton sold the only performing asset they had--the Sewer Authority-- to PAWC.  Now the sewer is tied directly into the water bill.  So, it is no longer a lienable charge.  As long as the tenant has their own water meter, they will pay for sewer.

The other change coming is a class-action suit being brought against Scranton, thanks in large part to @Adam Guiffrida.  Logic:  in PA, no municipality may profit from a service and/or put that money into the general account.  The suit is aimed at reducing waste/trash removal to what it actually costs the city.  Currently the charge is way over the city's cost.

With U of Scranton, Penn State Worthington, Marywood U, Johnson College and Lackawanna CC in our immediate area, it is a major student draw.  With two major hospitals, health related services sector is bringing lots of career-level jobs/investment.  Example:  Geisinger CMC just finished a $100M addition and bought the new Medical College--what a pipeline move!

Property taxes can be a bit sketchy in the sense that they often make no sense.  But one may always appeal.  The local transfer tax is DOUBLE.  Most of the rest of PA is 2%, Scranton is at 4%.

Sense of humor?  Scranton really doesn't have one.  What I mean to say is that if you want to sneeze inside the city limits, remember to pull a permit.  And remember, only contractors that are licensed in the city of Scranton can be hired.  Licensed in Philly or Harrisburg?  Nope--gotta get a Scranton GC license.

I'm not badmouthing the city--learn the ropes and rules, and it becomes workable.  What I'm getting to is, it looks like a sleepy lil hamlet of about 65 thousand folks, but, DON'T try sneakin round the back door.  When you get caught, it'll cost you.  Example: you MUST have a local representative (registered with the city) if you, the owner, live over 25 miles away from the city.  The rep can be a friend, relative, handyman, broker or property manager, but it is reqired.

So, hope this helps shed a little light my insights into property management in Scranton and surrounding towns.  Feel free to pm me with other/specific questions.

Bryan Zayac · Answer

@Lori Guliano @Chris Engler hey guys -- I'm from the Scranton area, and am actively seeking investment properties in the Scranton area. The University of Scranton, Marywood University, Commonwealth Medical College - these are all pretty high demand areas for rentals.

I'm going to look at a property later today, and hope to make an offer, I'll post details later - going to be a pretty big project.

Be careful with property taxes in Scranton. My father in law is trying to sell his mother's home in one of the nicer sections of Scranton. 2000sf SFH bought in 2006 for $178K, Currently the property has been reduced down to $139K. They'll be lucky to get $125K for it. Property taxes were $6,900 as of a few months ago. They've since been appealed twice, and are now down to around $4,000. Still, very high for the area.

Scranton is on its way back, and there will be some really opportunity around the corner I think. But as it stands currently, Scranton is not a very desirable place to live, specifically starting a family. Taxes are high, and the economy is coming back, but still has some work to do. With some good things on the horizon for the area, I think Scranton could be a good investment area in the coming years.

Lori Guliano · Answer

Hi Chris! I'm new to the real estate game.  I've been doing a lot of research in my home state of NJ, but our high property taxes make if difficult to find a deal that will create the passive income I'm hoping for.  Scranton has recently piqued my interest as well.. seems like there are a number of reasonably priced homes with decent cash flow potential, especially for investors willing to rent to college students.  Let's keep in touch!

Matthew Weiser · Answer

@Marc Winter

I just checked out Scranton’s official government website and the development and projects page is completely blank. As a potential investor, this is pretty concerning.

https://www.scrantonpa.gov/development.html

Chris K. · Answer

@Chris Engler

There are many of us on BP that invest in the Scranton and Wilkes-Barre area. Based on the data I've seen, it appears that Scranton area generates higher rents than the Wilkes-Barre area. But that's just based on what I've seen in the past. Both areas are also seeing some Class A rentals --- which you can interpret in many ways.

Disclaimer: While I’m an attorney licensed to practice in PA, I’m not your attorney. What I wrote above does not create an attorney/client relationship between us. I wrote the above for informational purposes. Do not rely on it as legal advice. Always consult with your attorney before you rely on the above information.

Chris K. · Answer

@Daniel Montes

That depends on the property. But as a general rule, it's hard for a landlord to dump sewer and waste fees to the tenant for practical reasons.

Disclaimer: While I’m an attorney licensed to practice in PA, I’m not your attorney. What I wrote above does not create an attorney/client relationship between us. I wrote the above for informational purposes. Do not rely on it for legal advice. Always consult with your attorney before you rely on the above information.

Adam Guiffrida · Answer

I am an active investor in the Scranton market. Prices are on their way back up. Highly recommend Josh Reilly. He is a realtor at Keller Williams.

Anthony Wilson · Answer

Hi, I was born and raised in the Scranton area and bought my first home a couple years ago. I understand why people avoid buying in scranton. The taxes are very high compared to neighboring cities. With that aside I'm still very interested in investment properties in the area. I was wondering if anyone had any tips for a newbie in the area. I'm looking to invest in multi family homes, rehab and hold.

Shaun J. · Answer

@Marc Winter -- You are amazing, Truthful insight. You basically just answred all of the questions I had while looking to invest in Scranton. I am going to email you if you don't mind. Perhaps you can help me find something that meets my criteria.

Great post and great insight here. Thanks everyone!

Chris K. · Answer

@Daniel Montes

Not on my laptop but if you just google "Scranton" and "real estate tax," you'll be able to find the new official page where you can check for taxes. Or you can just google the Lackawanna Tax Assessment Data and then calculate it from there.

Disclaimer: While I’m an attorney licensed to practice in PA, I’m not your attorney. What I wrote above does not create an attorney/client relationship between us. I wrote the above for informational purposes. Do not rely on it for legal advice. Always consult with your attorney before you rely on the above information.

Anyone in Scranton Pa?

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