Buying a home is the biggest investment most people will make, so what does that mean when you are ready to sell it? Whether we’re working with a professional investor or a long-time owner-occupant who’s ready to pass their house along, people often look to us for advice on thinking of a house as an investment.
When giving people advice, we are lucky to have a lot of experience to draw from:
We’ve flipped houses ourselves, so we have direct experience in this market (and we can quickly advise on major projects).
At this point in our careers, we’re seasoned real estate agents with deep insights into the weird, wild, and wonderful Pittsburgh market—and we can help our partners save money while generating the highest ROI possible.
But even with those advantages, maximizing the return on a real estate investment is a tricky business.
The housing market fluctuates. Buyers could try to undercut your pricing. A missed defect in the home (especially during the initial inspection) could lead to tens of thousands of dollars in unexpected expenses.
Or, if you’re unlucky, your basement could collapse during renovations—something that happened to us while we were preparing to move into our Pittsburgh home!
It’s a risk. But it could have a major payout with every home you work on.
Our Pittsburgh Home Investor Tips
There are plenty of unexpected expenses when it comes to being a Pittsburgh homeowner or Pittsburgh real estate investor. Here’s what you should think about:
1. Know the House
When you’re an investor, a house isn’t just a house. It’s a product.
And, as with any business, your product matters—especially when you’re trying to generate a meaningful ROI.
If you buy a home and discover it has problems, you have two choices:
Option 1: Ignore the problem, consider not disclosing it, and let someone else deal with it. Spoiler Alert: We do not recommend this option, and we don’t work with investors who choose this path.
Option 2: Deal with the problems.
Option 2 isn’t always attractive from a financial perspective. It costs money to knock out a termite issue or replace a leaky roof, but tackling the problem properly does two things:
1. It keeps your reputation intact. Pittsburgh is a relatively small market, and folks in the industry tend to know each other quite well. If you start ripping off homebuyers, other professionals will take note. But if you’re honest and invest where necessary, your fellow professionals will also notice—and they’ll look out for opportunities to work with you in the future.
2. It teaches you a valuable lesson about understanding your home before you purchase it so you can make smarter investments in the future.
2. Work With Someone Who Knows the Market
Pittsburgh is a strange place. We’re a 200-year-old city with 90 distinct neighborhoods and homes that were, on average, built 60 years ago.
That creates some unique demands for investors, real estate agents, and designers who are eager to stay on top of the latest trends and market developments throughout Pittsburgh.
At a minimum, know this: The strategies that work in other markets likely won’t work here. In Houston, for example, many of the homes are 20-40 years old and in relatively good condition. You could likely get away with simply patching some drywall, updating the paint, and refinishing the floors.
In Pittsburgh, though, many houses present their own unique challenges—and so do the neighborhoods.
For example, here’s how we recommended approaching two recent investment projects:
Home in Lawrenceville - Lawrenceville is a lively, upbeat neighborhood that has successfully revitalized itself after decades of being a local punchline. Now, though, it’s a proud hub of Pittsburgh culture and nightlife. With that in mind, we recommended the flip match that high-energy, urban lifestyle with big art, bold colors, and flashy design.
Home in Forest Hills - Despite the neighborhood’s proximity to Route 376 and Route 22, Forest Hills offers quiet, affordable housing with small pockets of shopping. For this home, we recommended leaning into the homesteader vibe, with vintage, wooden accents, warm lighting, and enough room for relaxing indoor hobbies.
Those were two radically different approaches, and they both paid off for the investors. But you’ll notice that neither strategy adopted the methodology that could have worked in Houston or another major market with relatively new housing stock.
3. Ask For Feedback During Renovations—Not After
We have a unique background as real estate agents. In addition to being agents, we also have a deep understanding of renovations and interior design, which makes us uniquely positioned to consult on multiple stages of a home flip.
That’s why we often recommend our investors regularly check in with us, another real estate agent, or a designer throughout the course of their renovations.
Two of our favorite tips:
1. Create Something Your Agent Feels Good About Marketing
You and your agent have very different responsibilities, but your actions ultimately impact each other.
They are responsible for getting you the best ROI possible. But you are responsible for creating something worth selling.
Consult with your agent to make sure you remain on the right track during renovations and redesigns. One wrong move could make your agent’s job much more difficult—and potentially derail your entire project!
2. Create A Design Board
We love creating design boards in Pinterest, Canva, and other platforms to draw inspiration and consolidate ideas into a single location. Use your design board as a North Star as you transform the home.
3. Create For the Neighborhood
As we mentioned earlier, your home should generally match the vibe of the surrounding neighborhood (after all, buyers are picking a neighborhood just as much as they’re picking a home).
As an extreme example, consider the space- and beach-themed ranch-style home in Plum. The home was unique, sure, and it was incredibly cool—but it was only really “buyable” for a very specific type of person.
As an investor, your job is to turn a profit. Make your life (and job) easier; match the home to the neighborhood and the buyers that will look there.
4. Understand What You’re Asking For
The price of the home matters, but so does the context surrounding your listing price.
In other words: What do you want?
By listing the house at a profit, are you asking for your work to get compensated? Or are you asking for a premium because you’re offering a premium product?
Either answer is fine, but the pricing needs to match the product. You can’t just slap on new paint and throw down some new floors and call it a new house.
If you’re going to mark up the house 50% for simple aesthetic updates, you’re likely going to run into some tough roadblocks that are hard to overcome until you either re-evaluate your price or have the features of the home match the price point.
Get More Support As An Investor
Real estate and investing is complicated, but we’re here to help. If you’re looking for long-term partners you can trust, contact us! We’d be delighted to help you transform Pittsburgh!