Advice on buying an investment property. Is the rental market strong? (Pittsburgh: 2014, houses)

[gladhands]

Garfield is adding amenities. More galleries, shops, bars and restaurants, and it has a grocery store. That's the draw. It doesn't matter if Lawrenceville still has room to grow. Garfield offers much of what made Lawrenceville a draw, while being more connected to the East End. It will draw people who have already been priced out of Lawrenceville.

[stburr91]

Originally Posted by gladhands

I was looking into buying rental properties in Troy Hill, but our realtor really, really, really believes that Garfield is set to explode. I'm inclined to agree with her.

There is nothing that is going to "explode" in Pittsburgh.

Remember that the last census estimate said the population was declining. This is of course just an estimate, but what we can take from that is that we are not seeing growth that would lead to any meaningful changes in mediocre neighborhoods in the near future.

Originally Posted by jea6321

for the OP, if you are going to be an absentee owner, buying a turnkey property on the higher end will most likely be the least headache. you will want a decent property manager ( pm me for ones to avoid) to take care of it. a 2-4 unit building would probably be the best bet from a financial outlook. The rental market is pretty strong in most good neighborhoods. there is an abundance of ultra high end stuff coming on the market or recently came on. The mid range stuff that is nice and updated, but not new and ultra chic (i.e. 1100-1350 range for 2 bedroom units) has plenty of demand.

as for garfield being about to "explode", its been in a 7 year slow steady climb out of being one of the worst neighborhoods in the city. Its now mostly stable, gritty, but not totally unsafe. there is no real catalyst for it to all of a sudden pop to super popular though. Lawrenceville has LOTS of room to continue with housing flips and renos, east liberty and southern highland park still have plenty of room for growth as well. the housing prices are already reflective of an improving neighborhood, so its not like you can go buy a livable house for next to free today, and see 300-400% appreciation over the next 5-10 years. I see it continuing to improve and increase in value ( just like most city neighborhoods) but it exploding in popularity or value just does not seem realistic.

Some good advice here. ^

Being an absentee landlord is not ideal for many reasons, so I would agree that a turnkey property could be the best bet for you.

The more units you have, the more economical property management becomes. Having a property manger for only one single family property can be fairly costly.

You may want to see if you can find anything in East Liberty, rather than Garfield. I haven't been following the market in that area all that closely, but I've been hearing that stuff is generally overpriced.

Good luck.

[slavicamerican]

Very good advice. Thank you, everyone!

[gladhands]

Originally Posted by stburr91

There is nothing that is going to "explode" in Pittsburgh.

Remember that the last census estimate said the population was declining. This is of course just an estimate, but what we can take from that, is that we are not seeing growth that would lead to any meaningful changes in mediocre neighborhoods in the near future.




Some good advice here. ^

Being an absentee landlord is not ideal for many reasons, so I would agree that a turnkey property could be the best bet for you.

The more units you have, the more economical property management becomes. Having a property manger for only one single family property can be fairly costly.

You may want to see if you can find anything in East Liberty, rather than Garfield. I haven't been following the market in that area all that closely, but I've been hearing that stuff is generally overpriced.

Good luck.

I think you may be out of touch with Pittsburgh's current housing market. The belief that East liberty is overpriced is rooted in preconceived notions of what East Liberty is. People are willing to rent $3000 apartments in East Liberty. People without preconceived notions of which Pittsburgh neighborhoods should be desirable want to live in East Liberty because that is where the stuff is.

[eschaton]

It also bears saying that even if the City's population really did decline by a few hundred people last year, as the City is gaining young professionals and likely losing low-income families, the number of households continues to rise. This is important, because it's an increase in number of households, rather than total number of people, which causes rises in real estate prices. Children don't pay rent after all.

[selltheburgh]

Originally Posted by gladhands

I think you may be out of touch with Pittsburgh's current housing market. The belief that East liberty is overpriced is rooted in preconceive notion's of what East Liberty is. People are willing to rent $3000 apartments in East Liberty. People without preconceive notion's of what Pittsburgh neighborhoods should be desirable and wants to live in East Liberty because that is where the stuff is.

Yeah, somebody mentioned to me that a house in Morningside was over priced. I said, "we'll they have 3 offers in the first week and it is selling for at least their asking price, so it definitely isn't over priced. It might be more than you are willing to pay though."

[xdv8]

Definitely look into Garfield. It's basically the last East End neighborhood that will largely improve over the next 5-10 years. I would say East Liberty but at $175k you are a year late in buying anything that doesn't need $50k in work at that price, and that's assuming you could find something.

Another piece of advice in general about East End housing market: If you see something you like, make an offer the same day or its gone. Incredibly fast market because of short supply.

[SteelCityRising]

The East End has been booming for the past decade and will likely to continue to boom. Oakland is the third-largest employment center in the entire state and is home to the two largest and most prominent universities in the region. East Liberty and the surrounding blocks are not only a re-emerging retail center but are also becoming home to many employers (i.e Google, UPMC, Autodesk, Duolingo, LUXE Creative, two dozen start-ups in the Cube business incubator, The Beauty Shoppe, Schoolhouse Electric & Supply, etc.) Any neighborhoods contiguous with Oakland and/or East Liberty are either already gentrified or are in the process of gentrifying.

I live in Polish Hill, and I went from renting a 1-BR apartment for $550/month when I moved here in 2010 and being told that rent was "a tad high" at the time by old-timers to watching homes across the street from me go onto the market for $400,000+ in 2016. Polish Hill is walkable to the Strip and Lawrenceville and is a quick bike ride to Downtown or Oakland, so our neighborhood has been eyed up by flippers for the past several years.

Garfield would be an excellent choice. Violent crime is MUCH lower than it has been in many years, and property crime, while relatively high by local standards, seems to have stabilized. When I worked for Postmates I made numerous deliveries to 20-somethings and 30-somethings who lived in Garfield and ordered vegan Chipotle bowls or groceries from Trader Joe's. The neighborhood's art walks are well-attended. I had a hard time finding a place to park one night during an art walk when I was trying to pick up an order from People's Indian Restaurant. I believe that Garfield will really continue improving over the next 5-10 years, especially thanks to its proximity to UPMC Children's Hospital.

Lawrenceville has largely priced you out, but if you can find something in the part of the neighborhood bounded by 34th Street to the southwest, Main Street to the northeast, and in between Liberty and Penn Avenues (roughly around or behind Church Brew Works) I would pounce on it. This is sort of the "forgotten" part of Lawrenceville, with a lot of homes still needing updating; however, it's EXTREMELY centrally-located.

Greenfield may be an option, especially the part closer to the Murray Avenue & Loretta Street area. Member shadowfax lives near there and can provide better insight, but it seems you may be able to find a multi-unit there in your price range (or slightly above). Greenfield is popular with people priced out of Squirrel Hill. It's a tad inconvenient right now due to a bridge closure, but when the new Beechwood Boulevard Bridge is completed it will be very conveniently located for employers and the colleges in Oakland.

[stburr91]

Originally Posted by gladhands

I think you may be out of touch with Pittsburgh's current housing market. The belief that East liberty is overpriced is rooted in preconceived notions of what East Liberty is. People are willing to rent $3000 apartments in East Liberty. People without preconceived notions of which Pittsburgh neighborhoods should be desirable want to live in East Liberty because that is where the stuff is.

I'm not basing the idea that the housing is overpriced in that area on my personal opinion, but on the opinions of a few buyers I've spoken to who were looking in that area.

I also never said that people don't want to live in East Liberty. Being a native of Pittsburgh, I do have preconceived notions, but I've long put them aside because I know that area is in transition.

Originally Posted by eschaton

It also bears saying that even if the City's population really did decline by a few hundred people last year, as the City is gaining young professionals and likely losing low-income families, the number of households continues to rise. This is important, because it's an increase in number of households, rather than total number of people, which causes rises in real estate prices. Children don't pay rent after all.

I'm not saying that there won't be any change to the city neighborhoods, I'm saying that the evidence shows that there won't be any rapid changes.

The truth is that it's not just the population decline that I'm basing my comment on, but the fact that we just aren't seeing any meaningful net job gains, and haven't for a few years now.

There is no reason to believe that there will be a large influx of young, well paid people to the city that will lead to rapid gentrification in the mediocre neighborhoods.

[eschaton]

Originally Posted by stburr91

I'm not saying that there won't be any change to the city neighborhoods, I'm saying that the evidence shows that there won't be any rapid changes.

The truth is that it's not just the population decline that I'm basing my comment on, but the fact that we just aren't seeing any meaningful net job gains, and haven't for a few years now.

There is no reason to believe that there will be a large influx of young, well paid people to the city that will lead to rapid gentrification in the mediocre neighborhoods.

I think Pittsburgh has enough internal demand (due to changing preferences of young people regarding where they want to live) to gentrify around 2-3 neighborhoods at once. Lawrenceville is essentially tapped out for the people who want to buy on the cheap - it has arguably been for five years, and it's becoming much more yuppie. No clear alternative has developed as of yet however. I personally think it's going to be Millvale, but arguments for Garfield and even Troy Hill can be made. All three of them won't happen simultaneously though.