Pittsburgh long term rental ROI expectations

[Josh Lang]

I am closing on my first investment property in the upper Lawrenceville area of Pittsburgh. I was able to get a nice low down conventional mortage and negotiate a good deal under list price. I will be living their with my gf for a year or two and plan on renting it out or AirBnb'ing it afterwards so i can move onto my next property. I did the ROI calculation as a rental unit long term assuming $1700/month and a 20% maintenance/vacancy escrow. Its a recently top-bottom renovated/flipped 3br 2ba so these seem like reasonable assumptions (agree? disagree?). Its working out to about a 15% roi on my downpayment+closing costs. I am curious if anyone has any input on expected ROI's based on your experience with rental properties in the Pittsburgh market? I also did some analysis and have a SouthSide flat's property identified that would be about a 15% return as well for someone with a low owner-occupied downpayment (happy to share this with anyone looking to partner up on it!). I utimately passed on this for the lawrenceville property.

[Alex Deacon]

@Josh Lang i find that new investors tend to be too optimistic. I have done it enough times believe me. @Dustin Lin points out to account for PM fees and also accounting, general repairs, large repairs like roof, furnace, sewer line etc.. Set aside enough for those larger expenses. For example just in the past 30 days I had a $7,000 roof and a $5,000 sewer line on a few of my properties. Also dont forget a vacancy factor. Be conservative on your rent amount also. If you get higher then great but if not then that greatly affects your net income and your ROI