Airbnb Investing in the Pittsburgh Market - A guide for new investors and lessons learned
Investing in short term and vacation style rental properties can be a very lucrative decision. Short term rentals in popular city neighborhoods can bring in net income on a monthly basis that is double or triple what you can do on the traditional long term rental market. As we now offer our vacation rental management service through the nationwide and newly launched pmitravel.com syndication network, we have learned many important lessons about what to do and what not to do in the market. Here are some of the most popular questions we are asked and what we have learned first hand from operating in the area.
1. Where does it work?
First, we will discuss where it doesn't work. Your home in the suburbs that you currently live in probably isn't going to make much on the Airbnb market. The demand just isn't there. These travelers and visitors are coming to our region for an event most likely. It could be a football game, baseball game, hockey game, concert, convention, theater/show, bachelor/bachelorette party or a family reunion. They want to stay at a destination spot where the action is. Cranberry Twp and Upper St. Clair just don't fit the bill.
Where it does work are the popular and trendy city neighborhoods. Here is the short list: Downtown (Theater District/Golden Triangle), Strip District, Mt. Washington, Southside, North Shore (Mexican War Streets), Lawrenceville/East Liberty, Oakland/Shadyside. Take a look at what is currently listed. Furnishings and amenities are important. Put the extra effort into adding that special touch to make your unit stand out to travelers. It will pay off in the long run.
2. What are the occupancy rates?
In the most popular and desirable city hot spots, you will be doing well to average 45 - 50% occupancy for the year. Pittsburgh is Pittsburgh, it just doesn't attract the crowds that New York and Miami do. There are peak months and slow months. During the summer and fall you can get up to 60% occupancy. This is the number you need to budget with to analyze your deal. Occupancy rates make or break your short term rental.
3. What is the political climate like in the city limits towards Airbnb?
It is actually quite friendly. There currently is not a city occupancy permit in place nor a ban on any short term rentals. But, the city has been trying to put an occupancy permit in place for a couple years now. It has met a firm opposition and is still making its way through city hall. Keep and eye on this developing situation.
4. What do the numbers look like?
Here is a snapshot of a common VRA (vacation rental analysis) that we use with our clients. This illustrates what you need to be thinking about and how to get to the bottom line of net operating income.
5. What to watch out for?
One big gotcha are HOA and Condo Associations. Before investing in that city condo that you are going to make a short term rental, get a copy of the condo association rules and regulations. They usually have some sort of rental restrictions they have put in place. Some outright ban short term rentals. Look for those rehabbed city dwellings and row houses that do not have an association in the picture. Also, be careful of renting an apartment that you intend to Airbnb. Most landlords do not allow this and they will figure you out eventually. Then you are stuck with a lease you can do nothing with.
Want to learn more about our vacation rental management service? Give us a call at 412-785-0400 or visit our website and fill out the contact form at https://www.pittsburghpropertymanagementinc.com/pittsburgh-vacation-rental-management