A & B Neighborhoods around philly

12 Replies

Quick question for you all - in the following counties in SE PA, is it possible to find 1.5+% properties (1-4plex) in A and B neighborhoods?

  • Philadelphia County
  • Montgomery County
  • Delaware County

How about over the river in NJ?

  • Camden County
  • Gloucester County
  • Burlington County

What do you mean by 1.5%+?

Originally posted by @Account Closed :

What do you mean by 1.5%+?

 I mean rental income is 1.5% or greater of the purchase price.

Oh ok. That makes sense. I don't think you will find it in Delaware County. It's got some pretty high taxes so your hurdle is pretty high. 

Philadelphia might be your best bet but not in the up and coming areas (like South Philadelphia, Fishtown etc.). North east philly, North philly are probably better. 

I don't know about NJ, but I've heard that state is very pro tenant. 

Thanks @Account Closed  that helps. I'm happy to spend time finding the right property, but having some idea of what is realistic will help me determine my strategy.

Anyone else have any thoughts?

For SFH, I think you could do C properties for 1.5%, but not B or A. I think you could hit 1% at A or B. Note that I don't really look around New Jersey.

I think it would be very difficult to find in Delaware & Montgomery Counties. After hearing the "% rules" at BP I got pretty discouraged since it doesn't seem like they exist in decent neighborhoods around here. But then it's made me re-evaluate my strategy - sometimes the lack of vacancies and repairs that need to be done in nicer neighborhoods are worth the lower % rule.

Checking Delaware (the state) is worthwhile too, generally lower taxes for similar neighborhoods in PA.

I agree with the others. If you looking at A or B neighborhoods I doubt you will get 1.5%. You would have to work hard to find 1% honestly. For example if you are looking at a house in Cherry Hill that sells for 300K I doubt it will rent for $4,500 a month as you are trying to get.

But nevertheless you never know, they might be out there. Great luck.

1.5% in Philly is attainable. But you are looking at C+ neighborhoods.

Originally posted by @Rhonda Jones :

1.5% in Philly is attainable. But you are looking at C+ neighborhoods.

 Thanks. Would you mind sharing some neighborhoods that you think are worth looking at?

I realize this thread is pretty dead but for anyone who cares, you can get a decent return in Montgomery county, you just need to look hard to find it and pounce before someone else gets it. I have a property in Cheltenham that give me 1.4% of purchase price. When I add in the repair costs the property needed when I bought it the ROI drops to 1.2%, but that's still decent in my book. Property is a "high C to low B" location.

I don't know about lower Montgomery county, but up by me its pretty much $300K+ SFR or you are investing in places like pottstown and norristown, which are way cheaper. It seems like everything is for sale in Pottstown for less than 100K, but the taxes are high and a lot of the block are C neighborhoods.

@Matthew F.

I agree with you. Both Pottstown and Norristown have the prices you want on the home but lack everything else. I am not saying the good deals are plentiful, but they do exist. The property I previously mentioned was an REO Duplex which had a 3 bed 1 bath and a 2 bed one bath. Got the property for about 85 cents on the dollar which is not spectacular but not horrible either. (This cost includes repairs I made after purchase.) Those two units cover costs + about $250 a/ month but what made it really worth it is the property also has 5 Garages and a 2 story small barn. All of which I rent out. The entire property was vacant when I bought it. One month for all repairs/ upgrades then marked it. ($65.00 worth of signage and a lot of free internet posts.) Took less than a month and it was fully rented. A step further the property also has a full basement that the bank had a new french drain and sump pumps installed before the sale. Basement is bone dry and in progress to become a one bedroom unit. This will increase the property value further as it will then be a Triplex with 6 storage units.

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