Good Rental Property Areas (SFR/Multi) in Pennsylvania?

Good Rental Property Areas (SFR/Multi) in Pennsylvania?

Jersey City, NJ · Member since 2017 · 11 posts · 14 votes

I'm looking to invest in SFR and small multi-families in Pennsylvania, ideally in the $100k-$130k purchase price range.

I'm based in Jersey City, NJ – due to high property taxes and purchase prices in my immediate area (Jersey/NYC), PA seems like the best state to dig deeper for my market research. I'm trying to identify rental markets that I can hone in on and research deeply, establish a team on the ground, and do my due diligence properly.

I've been combing similar posts on BP and potential areas I'm hearing about in PA include Allentown, Lehigh Valley, Bethlehem, Scranton, and Wilkes Barre.

I'm looking for markets with strong rental demand for the foreseeable future, where $100-200 cashflow/unit is possible (with property management), and can reasonably expect some appreciation in the next 10-20 years (2-4% per year would be ideal, though achieving positive cashflow on my first purchase is my #1 focus). Also important is being able to find a reliable property manager in the area.

I'd love to hear from local investors – am I looking at the right areas? Where else should I consider? Is there anything unique to investing in PA that I should be careful about? 

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Jersey City, NJ · Member since 2016 · 61 posts · 44 votes
8y

@Shane Rasnak I was in your shoes a couple months ago and I decided on Allentown due to the strong cash flows. I just closed on my first property this week and it meets your cashflow criteria. Best of all it was less than six figures! Feel free to PM me if you want to discuss more.

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  • Rental Property Investor · Asheville, NC · Member since 2016 · 67 posts · 62 votes
    8y
    Talk to Justin Brown. He’s a good friend of mine and he hosts meet-ups in the Allentown area. He can put you in touch with some other investors too.
  • Investor · Dallas TX, United States · Member since 2014 · 1k+ posts · 1k+ votes
    8y

    Pittsburgh is literally the best cash flow market in the country. come on down !!

  • Real Estate Agent · Allentown, PA · Member since 2016 · 197 posts · 181 votes
    8y

    @Shane Rasnak, it sounds like you are off to a great start. I work the Lehigh Valley and Monroe county markets, and most of my clients are out of state investors from NY/NJ.

    The good - with a little effort, you can definitely get deals that will cash flow in the $150 / unit range as completely passive assets. There is an extremely strong demand for rental properties in Allentown / Bethlehem / Easton, so you will get 95%+ occupancy rates. The Lehigh & Northampton markets closed out last month with an 11.8% one-year change in median sales price, which is some pretty big appreciation!

    The bad - there is a ton of demand for rental units, and it is a hot market. Inventory is at its lowest since 2005, and the average home is under contract within 48 days. Our team is currently averaging 26 days for our listings! If you find a good on-market deal you will need to move quickly since there will probably be multiple offers. We have been getting many of our deals through Sheriff's sales, REO's, off-market deals, and our direct marketing "cash offer" campaigns.

  • Mechanicsburg, PA · Member since 2013 · 3k+ posts · 2k+ votes
    8y

    @Shane Rasnak lots of good areas in PA. We're located in Central PA neat Harrisburg, the state capital. The largest employer is the state government and the second largest employer is the Federal government and we have the fastest growing county in the state. There are lots of oppoertuities for investing in SFH or Multi family here.

  • Jersey City, NJ · Member since 2017 · 11 posts · 14 votes
    8y

    Thanks @Christian Longacre! I'll reach out to Justin. 

    @David Ribardo Super helpful, thanks. I will keep looking into these areas. What are the driving forces behind the strong rental demand in Allentown / Bethlehem / Easton? Do you still those trends continuing long-term? Also, how difficult is it to find a good property manager in the area? 

  • Jersey City, NJ · Member since 2016 · 61 posts · 44 votes
    8y

    @Shane Rasnak I was in your shoes a couple months ago and I decided on Allentown due to the strong cash flows. I just closed on my first property this week and it meets your cashflow criteria. Best of all it was less than six figures! Feel free to PM me if you want to discuss more.

  • Real Estate Agent · Allentown, PA · Member since 2016 · 197 posts · 181 votes
    8y

    @Shane Rasnak, The strong demand comes from a limited supply of rentals on the market. We have been averaging 1 month of rental inventory, so it is definitely a sellers market. A balanced market typically has about 5-6 months inventory. Anything more than that would be a buyer's market.

    In addition, Allentown has a Neighborhood Improvement Zone that is driving lots of big money investments in the downtown area, such as the PPL center and waterfront. (https://www.allentownpa.gov/Neighborhood-Improvement-Zone) Easton and Bethlehem also have a good deal of commercial growth that is bringing up nearby property values. 

    There are many property managers in the area to choose from. The big property management companies will typically charge 10%, plus half of first months rent as a marketing fee. Don't underestimate the marketing fee - if tenants stay for an average of one year, it bumps your total management fees to 16%! I work with my clients to find much lower cost solutions, such as helping them partner with other investors to hire a full time manager together, or working with other real estate agents that also do their own management.

  • Real Estate Agent · Pittsburgh, PA · Member since 2015 · 1k+ posts · 846 votes
    8y

    @Shane Rasnak you can definitely find cash flow in that price range in Pittsburgh.  If you are willing to do some work to the property you can probably beat your goals. 

  • Real Estate Agent · Philadelphia, PA · Member since 2017 · 29 posts · 16 votes
    8y
    Philadelphia has a fantastic rental market.
  • Real Estate Broker · Northeast PA · Member since 2017 · 2k+ posts · 2k+ votes
    8y

    Not in any particular order, but I like Wilkes Barre (certain sections) Kingston, Moosic, Dunmore, Dickson City, Olyphant, Blakeley.  Scranton has low priced properties, but be cautious about the city politics and taxes.  PM me if you need more info.  Rental demand is very strong in these areas, and returns certainly can meet your expectations.

  • Member since 2018 · 1 post · 0 votes
    7y

    I am looking to invest in multi-family homes and want to understand how Harrisburg, PA fares in relation to the other areas you listed. 

    I've found a few nicely priced homes, but not sure how I to evaluate whether it's a good area since I'm not from there. Any help or tips would be great. 

  • Rental Property Investor · Montville, NJ · Member since 2014 · 82 posts · 10 votes
    7y

    Wow great thread @Shane Rasnak.  i am looking at the same numbers as you.  What did you end up doing? 

    @David Ribardo @David Krulac @Raymond Y. @Anthony Angotti @Marc Winter  Let's connect please!  I live in NJ and want to invest in buy/hold out of state.    I am ready to pull the trigger.  

  • Mechanicsburg, PA · Member since 2013 · 3k+ posts · 2k+ votes
    7y

    @Amul Sutaria sure PM me.

  • Real Estate Agent · Allentown, PA · Member since 2016 · 197 posts · 181 votes
    7y

    @Amul Sutaria Thanks for reaching out! Let me know if you have any specific questions about the Lehigh Valley market. If you want recommendations for Philly, Lancaster, or Reading I can point you in directions for some other skilled investor agents and team members to support you in those markets as well.

  • Real Estate Broker · Northeast PA · Member since 2017 · 2k+ posts · 2k+ votes
    7y

    @Amul Sutaria

    contact me for discussion of Scranton/Wilkes Barre areas for investment. 

  • East Stroudsburg, PA · Member since 2016 · 52 posts · 41 votes
    7y

    Poconos, Lehigh Valley are great areas

  • Member since 2018 · 9 posts · 0 votes
    7y

    Hey @David Ribardo,

    Coming from NY markets I'm now looking to switch markets and start investing in Pennsylvania. 

    I would love to have a conversation with you about what's trading and some factors in the leigh valley areas if you have just a few minutes 

    Thank you, looking forward!

  • Member since 2018 · 9 posts · 0 votes
    7y

    Hey @David Ribardo,

    Coming from NY markets I'm now looking to switch markets and start investing in Pennsylvania. 

    I would love to have a conversation with you about what's trading and some factors in the leigh valley areas if you have just a few minutes 

    Thank you, looking forward!

  • Real Estate Agent · Allentown, PA · Member since 2016 · 197 posts · 181 votes
    7y

    @Eli Schwarz It's a great transition for most people. The landlord tenant laws, taxes, and economic drivers make for a easy switch!

    • Member since 2021 · 2 posts · 0 votes
      5y
      Originally posted by @David Ribardo:

      @Eli Schwarz It's a great transition for most people. The landlord tenant laws, taxes, and economic drivers make for a easy switch!

      Hey David, I know this thread is from a few years ago but I am looking in the Philly area. Any chance you could point me in the right direction 

  • Real Estate Agent · Hudson Valley, NY · Member since 2012 · 63 posts · 14 votes
    6y

    This is a great thread! I see plenty of us living in the tri-state area are looking west for opportunity. 

    Pandemic aside, how are these markets today 6-24 months after a lot of the previous posts have went up?

  • Investor · Phoenix, AZ · Member since 2019 · 31 posts · 16 votes
    6y

    The Lehigh Valley is a pretty hot market. I live here and have watched all the construction popping up all over. The casino being built in Bethlehem probably helped a lot with all of the growth. I recently started wholesaling in the area and will have two deals completed by the end of the month. There are definitely still properties out there to buy at good prices if you find the right seller. 

  • Member since 2018 · 127 posts · 37 votes
    6y

    @Shane Rasnak Did you end up purchasing your property in PA? Where did you buy and how is your experience so far?

  • Rental Property Investor · NJ/PA · Member since 2016 · 555 posts · 149 votes
    6y

    anyone investing in reading / Hamburg/ Pottstown?    How are cap rate , crime , value appreciation, economy there ?

  • Contractor · Pottstown, PA · Member since 2018 · 216 posts · 160 votes
    6y

    Hey @David Smith, I invest in Pottstown. Cap rates are good, crime is not that great and not that bad (depends on the area - some places quite safe, some places slightly sketchy but nothing like north Philly), the area is coming up with a lot of new business investment but hasn't historically seen a lot of appreciation. We'll see what happens when business restrictions are lifted, but the local economy has seen a lot of investment over the past couple years.

  • New to Real Estate · New York, NY · Member since 2019 · 7 posts · 4 votes
    6y

    @Shane Rasnak, did you end up buying anything? I am actually looking for the same numbers as you and would like to have your take on this.

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