Interest in Rental Properties around Pittsburgh, PA

[Tyler Mau]

Hi everyone,

I'm an out-of-state investor looking to potentially buy a rental property around Pittsburgh, PA. I know some people who live/lived in Pittsburgh, but I would like to see if anyone has advice from an investor's perspective. I've heard that the area near CMU, University of Pittsburgh, and Google's office (East Pittsburgh) is a good rental market, a decent area, and potentially a good place to invest in rental properties. It seems like there is quite a good price:rent ratio in the area, and I've heard that areas like Shadyside are up-and-coming. So based on what I've learned from people from the area, I have a few questions for investors:

• Is this a good area to invest in rental properties? Are there any other areas that I should maybe look at?
• Since a lot of properties in Pittsburgh are very old, should I be worried about major rehab work?
• My colleagues from the area said people are quite accustomed to living in the older places since there's not a lot of other reasonably-priced options. To what extent would it be worth renovating to "modernize" a place for a rental? Will newer renovations affect the rent enough to make it worth the renovation costs? (I know this is a vague question and depends on the extent of renovations, but if anyone has some general advice about this, I would much appreciate it.)
• I've also heard that there were recently a lot of "luxury" apartments built around East Pittsburgh that now have a bunch of vacancies. It seems that perhaps the prices are too expensive for people to want to live there. Does anyone know how this has affected the rental market recently or if you foresee any problems with occupancy for a rental property in the future?
• Lastly, does anyone have any suggestions for great real estate agents, property managers, or contractors in the area? I'm looking to put together a good team I can rely on (especially being an out-of-state investor). I foresee buying several properties in the next few years, so having a good team in place would benefit all involved.

Thanks in advance for any advice/suggestions! I am really looking forward to buying my first property in the coming months and expanding to more in the coming years! Please feel free to reach out and connect with me if you would to network and discuss rental property investment! I'm always looking to exchange knowledge with other investors!

Best,

Tyler

[Phil Anderson]

Hi Tyler,

Shadyside isn't exactly what I'd call up and coming - it's been the "rich neighborhood" of Pittsburgh for as long as I've lived here.  It has a mix of college housing and mansions, and is a typical place for older professionals to live, so a mix of lawyers and doctors.  The other areas you mentioned are indeed consistent rental areas because of the universities, but I've personally had a hard time finding values because it's either in multi-generation cash flow dumps in Oakland, or competing with young profressionals for SFHs in Squirrel.

• Since a lot of properties in Pittsburgh are very old, should I be worried about major rehab work?

Yes - especially housing that has been used as a rental previously, because people do a lot of "weekend handyman" work as cheap as possible (this probably isn't specific to Pittsburgh).

• My colleagues from the area said people are quite accustomed to living in the older places since there's not a lot of other reasonably-priced options. To what extent would it be worth renovating to "modernize" a place for a rental? Will newer renovations affect the rent enough to make it worth the renovation costs?

In the areas you mentioned anyone who is not a college student would probably be looking for a modernized apartment, it could certainly be a good way to increase the rental rates of an older unit.

• I've also heard that there were recently a lot of "luxury" apartments built around East Pittsburgh that now have a bunch of vacancies. It seems that perhaps the prices are too expensive for people to want to live there. Does anyone know how this has affected the rental market recently or if you foresee any problems with occupancy for a rental property in the future?

Pittsburgh is kind of weird, within a 3 mile radius you can find rentals going from $300/month to $3000/month - you have to find a niche you want to cater to and do analysis on that cohort.  Vacant $3000/month units aren't affecting $600/month units.

• Lastly, does anyone have any suggestions for great real estate agents, property managers, or contractors in the area? 

I can PM you a good real estate agent, but honestly still looking for a property manager I like myself (also welcome recommendations from the BP community!)