Challenging Pittsburgh rental markets this year in 2024

[Jason H.]

Has everyone noticed that the rental market in PGH been especially difficult this year? My properties are in Brentwood, used to be able to get many applicants, but now it's just a trickle in the height of summer and quality of tenants is less than desirable and with much longer DOM.  It seems that good, decent, qualified tenants have the pick of the litter, often flaky and uncommitted when there is so much supply out there.  I understand that rent price is a huge factor, but there is only so much room you can lower it before all you attract is the wrong crowd. 

What has everyone been doing to deal with this reality?

[Kevin Sobilo]

@Jason H., one comment in your post didn't make sense to me: "but there is only so much room you can lower it before all you attract is the wrong crowd".

I don't understand that statement at all. I can understand that low cost housing will appeal appeal to a different tenant profile, but if the product itself is very good won't it also attract the kind of tenant you want more readily?!?

In my opinion, who cares how many unqualified tenants are attracted if I am able to attract a good qualified tenant readily.

Also, at a lower price point OR by offering more than comparable rentals that good tenant stays longer causing you less expenses for turnover/vacancy. Sometimes, charging LESS rent actually earns you MORE money in the end!

Beyond price, I look carefully at the value proposition I offer. Why would a good tenant want my rental? What appliances do I include (washer, dryer, dishwasher, microwave hood, etc)? Do I allow pets? Things like this can be relatively low cost low risk propositions if managed well but can set your units apart from others who don't offer these things.

[Jeremy Taggart]

@Jason H. depends on the area, but I have noticed in the higher rent areas it's taking a bit longer to fill. I've noticed there's just a lot more available active rentals which I think is the main cause. More people probably looking in the cheaper/median priced areas as well with inflation kind of hitting peoples wallets more the last year or two.

I think updating the units and being more aggressive on price is really all you can do since we obviously aren't in control of the economic factors. That and being more proactive on showings/processing applications since applicants have more options to choose from than when rental market was super hot during covid.

[Anthony Angotti]

Quote from @Jason H.:

Has everyone noticed that the rental market in PGH been especially difficult this year? My properties are in Brentwood, used to be able to get many applicants, but now it's just a trickle in the height of summer and quality of tenants is less than desirable and with much longer DOM.  It seems that good, decent, qualified tenants have the pick of the litter, often flaky and uncommitted when there is so much supply out there.  I understand that rent price is a huge factor, but there is only so much room you can lower it before all you attract is the wrong crowd. 

What has everyone been doing to deal with this reality?

 It depends on the unit. Updated units that show well still move quickly at or above market rent.

What type of finishes does your unit have? We aren’t having an easier or harder time than usual. We normally use rentometer to determine the median rent and then price them around there. 

I’d say it usually takes 2-4 weeks to lease. Sometimes it’s a little longer, but that’s maybe 1/10 apartments. Then we reduce once or twice or notice issues with the listing. 

[Anthony Angotti]

Quote from @Kevin Sobilo:

@Jason H., one comment in your post didn't make sense to me: "but there is only so much room you can lower it before all you attract is the wrong crowd".

I don't understand that statement at all. I can understand that low cost housing will appeal appeal to a different tenant profile, but if the product itself is very good won't it also attract the kind of tenant you want more readily?!?

In my opinion, who cares how many unqualified tenants are attracted if I am able to attract a good qualified tenant readily.

Also, at a lower price point OR by offering more than comparable rentals that good tenant stays longer causing you less expenses for turnover/vacancy. Sometimes, charging LESS rent actually earns you MORE money in the end!

Beyond price, I look carefully at the value proposition I offer. Why would a good tenant want my rental? What appliances do I include (washer, dryer, dishwasher, microwave hood, etc)? Do I allow pets? Things like this can be relatively low cost low risk propositions if managed well but can set your units apart from others who don't offer these things.

 At a lower price point I will say that you start to see lower quality applicants. It has to be a pretty big difference though. 

For instance if someone rents a $1200/mo apartment they need to make minimum $3600 per month for most landlords. That’s a pretty reasonable job with full time hours. A person with a reasonable full time job is typically a more responsible adult and has to act in a professional manner for their job. 

When you start to get to $700/mo you might see more people with less stable employment and part time employment since that’s $2100/mo in income. Generally speaking the people applying may have less professional jobs and may have less professional behavior. 

That’s a wide generalization and I’ve seen people that make $200k or more a year be total jerks and trash units, but I kind of get what he’s saying. Just like when tickets for a Steelers game are expensive you generally have more respectful fans, when they get cheap you get more people getting hammered and being jerks. 

[Kevin Sobilo]

Quote from @Anthony Angotti:

Quote from @Kevin Sobilo:

@Jason H., one comment in your post didn't make sense to me: "but there is only so much room you can lower it before all you attract is the wrong crowd".

I don't understand that statement at all. I can understand that low cost housing will appeal appeal to a different tenant profile, but if the product itself is very good won't it also attract the kind of tenant you want more readily?!?

In my opinion, who cares how many unqualified tenants are attracted if I am able to attract a good qualified tenant readily.

Also, at a lower price point OR by offering more than comparable rentals that good tenant stays longer causing you less expenses for turnover/vacancy. Sometimes, charging LESS rent actually earns you MORE money in the end!

Beyond price, I look carefully at the value proposition I offer. Why would a good tenant want my rental? What appliances do I include (washer, dryer, dishwasher, microwave hood, etc)? Do I allow pets? Things like this can be relatively low cost low risk propositions if managed well but can set your units apart from others who don't offer these things.

 At a lower price point I will say that you start to see lower quality applicants. It has to be a pretty big difference though. 

For instance if someone rents a $1200/mo apartment they need to make minimum $3600 per month for most landlords. That’s a pretty reasonable job with full time hours. A person with a reasonable full time job is typically a more responsible adult and has to act in a professional manner for their job. 

When you start to get to $700/mo you might see more people with less stable employment and part time employment since that’s $2100/mo in income. Generally speaking the people applying may have less professional jobs and may have less professional behavior. 

That’s a wide generalization and I’ve seen people that make $200k or more a year be total jerks and trash units, but I kind of get what he’s saying. Just like when tickets for a Steelers game are expensive you generally have more respectful fans, when they get cheap you get more people getting hammered and being jerks. 

I don't get your line of thinking at all. A couple each making $10.50/hour qualify for a $1200/month rental. In my market $10.50 is BELOW the average for an entry level labor intensive job requiring no education.

I think you also miss my point entirely. Market rent means that there is variance in pricing. So, if the top dollar people are getting for a comparable rental is $1350 and the average is $1200, coming in at $1100 could attract not only LESS qualified tenants but also a LARGER number of QUALIFIED tenants.

Also, with your $700 example, I think you're conclusion doesn't cover the most common scenarios. Someone making entry level wages may have less stability in any given job, BUT their job is EASILY replaceable. Whereas when a professional gets laid off/downsized they could have MUCH more trouble finding comparable employment.

As for your Steeler's ticket reference. Are there credit and background requirements for buying tickets? Do they check references from prior landlords before selling you tickets? Who cares how many LESS qualified people you get if you are able to attract and KEEP more well qualified people!

[Elise Bickel Tauber]

I've been doing this for 20 years and it seems every election year we see this slow down about 6 months or so before the election. I'm not exactly sure why, but it happens every time. That mixed with inflation does make it a slower market. I think part of the problem is those who are well qualified and can purchase are, with concerns of interest rates going down in the near future (1-2 years) that will inflate home prices even more. Those who don't have as much saved up to purchase or just dont want to spend right now are holding tight. The cost to move is expensive between security deposits, moving costs, etc. A lot of people who don't need to move aren't moving. If you price your rentals at a reasonable price and stay steady with advertising and showings it should go.