Pittsburgh Neighborhoods for young professionals, 1% rule

[Edita D.]

Hey guys! We just sold our 4-unit building in San Diego, looking to do a 1031 exchange. 

We would like to invest 700-900K (two buildings containing 2/3/4 units) into neighborhoods with young professionals (NOT STUDENTS), where we'd like to be able to collect 1% rent (of the purchase price).

I've been looking at Lawrenceveille, Morningstar, Highland Park, Sq. Hill, South Side (Slopes and Flats) and Mt. Washington neighborhoods, but I am not sure our 1% rule can be met here due to increasing home values in the area in the past 2-3 years.

I was also looking at Brookline and Greenfield.

Any other suggestions for other good neighborhoods with strong rentals and low vacancy rates?

[Jeremy Lee]

Hi Edita,

This is totally possible here in Pittsburgh. I would note that the south side slopes are still in a time of transition, there are areas that aren't that great, still with higher crime and not too much gentrification yet. I would recommend you take a look at the BakerySquare area, there was a duplex around there for $390k, rents were about $2k, so that meets your one percent rule. Also try looking at Stanton Heights / Upper Lawrenceville, you could probably get 1.5% or 2% in those areas if you buy right. Those areas are the next to turn around, squeezed by Highland park and lawrenceville on both sides.

Check out the north side/mexican war streets, there are a couple really nice areas there right next to some shadier areas up there, lots of young professionals though.

I was at a rental flip down in brookline the other day, the 4 plex next door sold for $179k, so if the rents are about $750/unit, its about 1.6%. This one was right on the MLS.

The South side has a mix of young professionals and college aged students. 

Best of luck,

Jeremy