Cash Flow Investing In Pittsburgh

[Carol Hiott]

Hello, 

I work for a real estate company in Pittsburgh. I've been discussing a few different investment options for the city and wanted to see what actual investor are thinking along the lines of investing in cash flow in the city vs flipping. I complied a few different points from different sources, including our Director of Investment Services thoughts and opinions. I'm wondering what are your opinions on investing in Pittsburgh and do they align with what were seeing as a company doing business in the city.

Investing In Pittsburgh

Is Pittsburgh a good place to invest?

Yes, Pittsburgh house prices are 43% lower than the national average with a median price of $213K. The city has many homes that need a little TLC that make it great for flip. Pittsburgh is also arguably one of the best cities for healthcare in the country. It is a hub network for the University of Pittsburgh Medical Center (UPMC) and Allegheny Health Network. Public transportation for residents is also easy and affordable. In Pittsburgh, the price for public transportation is 3% below the state average with bus tickets to get almost anywhere in the city being only around $3 and the monthly pass being just under $100.

Pittsburgh Has a Strong Renters Market

Over 50% of Pittsburgh residents rent rather than own property. Pittsburgh is home to more than 60 higher education institutions with thousands of students and faculty. Additionally, hundreds of businesses, including global leaders like Google, Amazon, Apple, Facebook, IBM, Microsoft, and Uber, are in Pittsburgh and draw thousands of professionals to the city annually. If someone decided to invest in cash flow properties, there will always be a large pool of potential tenants to draw from. This also means that property owners will be able to benefit from fewer vacancies from the high demand of rental homes in the city.

How to get started on investing in Pittsburgh

Flipping houses may seem appealing when first getting started in investing. However, the first step is always to create yourself a cash flow. Pittsburgh has many duplexes and multi-units that are on the market and turnkey. Meaning that they are ready to rent. Due to the large number of renters in the city, most of these properties already have tenants living in the units making getting cash flow in the city increasing easy. Flipping in the city can be a little more difficult, but still successful. Speaking with Austin Daniel, the Director of Investment Services at Bridge Home Realty. His opinion on flipping in the city is, “Flipping works best in fast appreciating metros areas, where house prices shoot up quickly. In places where the population has plateaued, such in a city like Pittsburgh, which has a very stable buy and hold market. To flip, you pretty much need to be in the most desirable areas. Neighborhoods that hit $350,000 or more in median home sales prices. Most investors generally agree that for flipping, there must be at least a 20% profit, and it’s in those areas you’ll find that profit. In places where we are seeing success is typically an investor who has secured a couple great cash flowing properties in the city and then gone after those houses in the more desirable areas to flip those properties. They have a great established cash flow, thanks to the city’s rental needs and can go after flipping the houses with the best profit margin. There is of course a higher amount of money that is being invested, but as they say, high risk, high reward.”

Please let me know on your opinions! 

Thank you,

Carol Ann