I didn't want to manage my DNS resolution in multiple places so I took a slightly different approach.
My router is a Ubiquity Dreammachine (UPD-Pro). I started by getting everything working without the pi-hole in the loop - using DHCP on the UDM-Pro. Once everything was working (local and remote name resolution) I changes the UDM-Pro to tell the DHCP clients to start using the pi-hole as the DNS server.
UDM-Pro IP: 172.24.5.1
Pi-hole IP: 172.24.5.2
On the pi-hole I then configured the upstream DNS server to be my UDM-Pro router and unticked Never forward non-FQDNs.
This way the pi-hole will filter out the bad records but forward all other requests to the UDM-Pro to resolve:
pi-hole: Settings>DNS
UDM-Pro: Settings>Networks>LAN>Advanced
Hope this helps.