Interested in owning a rental property in the Pittsburgh real estate market? Let’s see if it’s wise to invest here.
One of the most important success factors of real estate investing is the location or housing market where your property is located. To make the most of your investment, you should buy property in the best places to invest in real estate. If you’re a real estate investor in Pittsburgh, you might be wondering if the city is still a good location that offers profitable investment opportunities. Short answer: yes! Keep reading as we explain why property investors should consider buying in the Pittsburgh real estate market 2019.
Pittsburgh in the PwC’s Emerging Trends in Real Estate 2019 Report
Every year, PricewaterhouseCoopers (PwC) and the Urban Land Institute (ULI) release the Emerging Trends in Real Estate Report in which they present predictions of what’ll come to the real estate industry and list the best cities in the US housing market to buy an investment property. While Pittsburgh didn’t make it to the very top of the list, chief economists claim that “Philadelphia and Pittsburgh are showing that they have unique attributes that deserve attention.”
To find out which cities made it to the top of the list of markets to watch, read “10 Best Places to Invest in Real Estate in 2019.”
According to the report, real estate investors in Pittsburgh have the opportunity to invest at lower entry price points and have the benefit of proximity to a significant percentage of the US population. In addition, the Pittsburgh real estate market is adjacent to a gateway market (New York). As a result, the city is seeing increased interest from property investors and developers since it is less competitive but still offers a good real estate return on investment.
As a matter of fact, according to data from a study by Lending Tree, Pittsburgh is one of the cities that has the least competitive buyers in the country! The average down payment for Pittsburgh houses for sale is only 13% and the share of buyers with good or excellent credit is 45%. As a Pittsburgh real estate investor, this gives you the benefits of increasing your odds of securing your next rental property – if you’re well-prepared.
Pittsburgh Real Estate Home Prices + Appreciation
If you’re wondering where to buy an investment property for high cash on cash return, the Pittsburgh real estate market is a top choice. While Pittsburgh has become a world-class city, home prices are still lower than the US national average.
The median listing price of Pittsburgh houses for sale is $200,000 which is considered very affordable for real estate investors. Furthermore, the median sales price is $144,200. This indicates that Pittsburgh is a real estate buyer’s market.
Related: The 2019 US Housing Market: A Seller’s Market or Buyer’s Market?
Another reason to invest in Pittsburgh rental property is related to real estate appreciation. Of course, home prices have been increasing all over the US housing market. As for the Pittsburgh real estate market, it has been enjoying strong appreciation over the past ten years. According to LittleBigHomes.com the historical home price appreciation for Pittsburgh real estate properties is as follows:
- 6.2% in the last year
- 23% in the last 5 years
- 32% in the last 10 years
According to Zillow, the median home value in Pittsburgh is $149,500. That is an increase of 13.2% over the past year. In addition, Zillow further predicts home values in the Pittsburgh housing market will rise by 10.0% in 2019.
All of this means home prices will be higher in the 3rd quarter of 2019 than they were in the 3rd quarter of 2018. So, if you’re ready to buy an investment property in the Pittsburgh real estate market, don’t wait any longer! Now is the best time for property investors to jump in the market before prices get any higher.
Want to quickly find a profitable rental property for sale in Pittsburgh? Use our Property Finder to find lucrative investment properties that match your criteria in a matter of minutes!
Pittsburgh Is Named Best City for Jobs
For the second consecutive year, Pittsburgh has been crowned the title of “best city for jobs” among the 50 largest metro areas by Glassdoor, one of the world’s largest job and recruiting sites. The ranking was based on the number of hiring opportunities relative to population, the area’s affordability and cost of living, and job satisfaction.
Pittsburgh ranked 4th in overall hiring opportunities and 2nd in overall affordability, with a median base salary of $46,500. These two factors alone were enough for Glassdoor to give Pittsburgh a 4.7 score out of 5 – higher than the runner-up cities, St. Louis and Indianapolis, which each received a 4.3 score.
In addition to being a mass steel producer, The Steel City also produces natural gas, oil, and glass. Other industries that contribute to Pittsburgh’s strong job market include film, education, engineering, robotics, and healthcare. The unemployment rate in the city is 3.8% which is below the national average. This strong job market is what helped the Pittsburgh real estate market withstand the recession. This incredible job market strength, tagged with affordability, low crime rate, and vibrant culture, makes Pittsburgh one of the most livable cities in the US.
It’s Better to Rent Than to Own in Pittsburgh
Pittsburgh’s livability and strong job market draw many to live in the city. For a real estate investor, this means more potential long-term tenants. Although Pittsburgh’s overall population has declined since 2010, the number of millennials (aged 25 to 34) living in the city has grown significantly. As a matter of fact, Time consistently ranks Pittsburgh in the top 10 cities in the US where millennials are moving.
Related: The Best Cities to Invest in Real Estate to Rent Out to Millennial Tenants
Furthermore, it’s better to rent a home than own one in the Pittsburgh real estate market. That is according to the Beracha, Hardin & Johnson Buy vs. Rent Index. The index predicts that Pittsburgh, along with other cities including Atlanta, Dallas, Denver, Los Angeles, Minneapolis, Philadelphia, San Francisco, Seattle, and Honolulu will all experience downward demand for ownership. The fact that millennials often prefer renting to buying is also good news for investors of rental properties.
On top of that, based on real estate data and analytics from Mashvisor, the price to rent ratio in Pittsburgh is 20. This further proves that residents in the city see that renting a house is better than owning one. All of this indicates that the rental demand in the Pittsburgh real estate market is strong and is likely to rise in the coming years. Plus, the combination of lower property prices and high rental demand makes for positive cash flow and a strong chance for equity growth over the long-term!
To learn more about Mashvisor’s analytics and how we’ll help you make faster and smarter real estate investment decisions, click here.
Top Neighborhoods for Investing in Pittsburgh Real Estate
When it comes to investing in a big city like the Pittsburgh housing market, you might find yourself wondering where exactly will you find good investment opportunities. According to the Emerging Trends Report, Pittsburgh continues to look for ways to expand development in the city center. However, it’s the suburbs that are enjoying success, offering more attractive opportunity to real estate investors, especially those interested in traditional rentals.
Now, based on data from Mashvisor’s Investment Property Calculator, these are the best-performing neighborhoods in the Pittsburgh real estate market with the highest traditional cash on cash return values:
Central Business District
- Median Property Price: $192,933
- Monthly Rental Income: $4,308
- Traditional Cash on Cash Return: 9%
Larimer
- Median Property Price: $99,000
- Monthly Rental Income: $1,331
- Traditional Cash on Cash Return: 8%
Upper Hill
- Median Property Price: $140,000
- Monthly Rental Income: $1,661
- Traditional Cash on Cash Return: 7%
Northview Heights
- Median Property Price: $121,750
- Monthly Rental Income: $1,422
- Traditional Cash on Cash Return: 7%
Perry South
- Median Property Price: $105,933
- Monthly Rental Income: $1,083
- Traditional Cash on Cash Return: 6%
Allentown
- Median Property Price: $190,500
- Monthly Rental Income: $911
- Traditional Cash on Cash Return: 5%
To start looking for and analyzing the best investment properties in your neighborhood of choice, click here!
What About Airbnb in the Pittsburgh Real Estate Market?
Investing in Airbnb short-term rentals continues to be smart real estate investment strategy in 2019. However, before listing a property for rent on the site, you should check whether this is legal in your city. In the state of Pennsylvania, there are no outright prohibitions on short-term leases. However, Airbnb hosts may have to contend with local zoning regulations.
Airbnb investors have it worst in some cities. For example, in Los Angeles, Airbnb hosts are subjected to a permitting process where violations of certain restrictions can lead to suspension or cancellation of licenses. In Austin, there are regulations that limit the number of guests who can rent a property at any given time to ten people.
On the other hand, similar restrictions and regulations do not exist in the Pittsburgh real estate market and other cities in Pennsylvania. Property investors may rent out their properties on a short-term basis and enjoy the extra rental income. In fact, Mashvisor’s data shows that Airbnb is really the optimal rental strategy as it proves to bring higher cash on cash return!
If you’re thinking of buying an investment property in Pittsburgh to rent out on Airbnb, these are the top neighborhoods to consider according to our Investment Property Calculator:
Upper Hill
- Median Property Price: $140,000
- Monthly Rental Income: $3,067
- Airbnb Occupancy Rate: 59%
- Airbnb Cash on Cash Return: 13%
Summer Hill
- Median Property Price: $244,900
- Monthly Rental Income: $5,070
- Airbnb Occupancy Rate: 57%
- Airbnb Cash on Cash Return: 13%
Perry South
- Median Property Price: $105,933
- Monthly Rental Income: $3,406
- Airbnb Occupancy Rate: 64%
- Airbnb Cash on Cash Return: 12%
Carrick
- Median Property Price: $133,867
- Monthly Rental Income: $2,465
- Airbnb Occupancy Rate: 56%
- Airbnb Cash on Cash Return: 11%
Beechview
- Median Property Price: $121,675
- Monthly Rental Income: $2,273
- Airbnb Occupancy Rate: 49%
- Airbnb Cash on Cash Return: 10%
Larimer
- Median Property Price: $99,000
- Monthly Rental Income: $1,992
- Airbnb Occupancy Rate: 64%
- Airbnb Cash on Cash Return: 10%
There’s no doubt about it: the Pittsburgh real estate market is still a good place for owning and investing in rental properties in 2019. Not only that but investing in Pittsburgh houses for sale can be a smart investment for both traditional and Airbnb rentals. So, what are you waiting for? Start out your 14-day free trial with Mashvisor now to find lucrative investment properties in The Steel City in a matter of minutes