In my experience, the rents definitely seem to be that way and make it worthwhile (although the school district isn't as preferred as Ridley and the level of crime seems to be a bit higher in Collingdale, but not much). In Collingdale, my cash on cash return is at least 36% on PITI (so not counting vacancies and maintenance) on the properties at the time I purchased them.
In fact, I'm always over 30% cash at a minimum, no matter the area or the property.
Today, my properties there are giving me literally Infinite rates of Return since I've either paid back the private money I borrowed to acquire them within 6 to 12 months of purchasing or with the ones I've had traditional financing on, I would always make sure the cash flow greatly outweighed the cost of the mortgage. Plus, on most of these properties I added improvements that could justify more rent/cash flow (like added garages, bedrooms, etc) or I re-leveraged the properties by re-investing the equity.
Real Estate Professional · Media, PA · Member since 2017 · 23 posts · 13 votes
9y
Thanks @Dave Van Horn In your experience, what is the cash on cash return for duplexes and triplexes in the area? I was looking at 2 properties that are turnkey investments, and they seem to be profitable. It looks like the properties are selling at a low enough price and the rents are comparable to other higher property value areas such as Ridley and Holmes. What is your take on this?
In my experience, the rents definitely seem to be that way and make it worthwhile (although the school district isn't as preferred as Ridley and the level of crime seems to be a bit higher in Collingdale, but not much). In Collingdale, my cash on cash return is at least 36% on PITI (so not counting vacancies and maintenance) on the properties at the time I purchased them.
In fact, I'm always over 30% cash at a minimum, no matter the area or the property.
Today, my properties there are giving me literally Infinite rates of Return since I've either paid back the private money I borrowed to acquire them within 6 to 12 months of purchasing or with the ones I've had traditional financing on, I would always make sure the cash flow greatly outweighed the cost of the mortgage. Plus, on most of these properties I added improvements that could justify more rent/cash flow (like added garages, bedrooms, etc) or I re-leveraged the properties by re-investing the equity.
Real Estate Professional · Media, PA · Member since 2017 · 23 posts · 13 votes
9y
@Dave Van Horn wow sounds like Collingdale could be a pretty good investment. I am really interested in either a duplex or a triplex to start. Do you have any particular system for getting good tenants? Also, are there any other areas in Delco that you would consider good cash on cash return. I've been doing a lot of research and crunching numbers. I had an appointment this week to look at 2 potential turnkey properties with long term tenants, but the realtor flaked on me, so it never happened. It seems that you really have a great grasp of the process and how it works in this area. Thank you so much for reaching out to me and answering my questions. I really appreciate it.
I use Micozzie Realtors for property management and to find tenants. They're located very very close to Collingdale (in Alden) and know the area really well. I've used them for years and they've done a great job finding me tenants. I've done it myself back when I was a property manager for my own portfolio (and other investors' portfolios) and speaking from experience, I much prefer utilizing them to find tenants.
As for other areas, that's a good question. What's right for me may not be right for you but the areas I always bought in were Clifton Heights, Upland, Trainer, Marcus Hook, Lynwood, and Tinicum but I haven't bought hard property in years. As I got older, my strategy shifted more towards notes. The last thing there are two things to be mindful of in Delco, the taxes and some of the townships. Other than that, I've had much success there.
Real Estate Professional · Media, PA · Member since 2017 · 23 posts · 13 votes
9y
@Dave Van Horn thanks so much for the great insight! Taxes vary so much in Delco it's crazy! I like Micozzi I used them when I lived in Drexel Hill years ago. I will definately keep them in mind. Thanks so much again! Your insights are invaluable.
Contractor · Chadds Ford, PA · Member since 2015 · 567 posts · 460 votes
9y
Dave Van Horn nailed it right on the head. Very good analysis of the area. I have one rental in Collingdale then a few more in surrounding areas. I like to stay further north and/or west of Darby. Generally north of Chester Pike and West of Roberta (intersects with McDade).
All of mine are single family row homes so I cannot help you much in the duplex/triplex area, but I do know I do not see very many of them come up. That is mostly because my searches are not geared towards them though. I would think the numbers are similar or better.
As far as finding tenants, there are still good tenants looking to live in this area, you just have to be very disciplined in your screening. Set your tenant criteria and stick to it. I market on Zillow which sends it to all of the major sites like Hotpads and Trulia, then I post it to Craigslist as well.
Good luck! Let me know if I can be of more help!
At one time I had 8 properties Eddystone, today I have 3. I've reduced my holdings there mainly because of the aggravation from the borough. There is definitely an anti-landlord sentiment there. But it's a good school district, lower taxes (for Ridley Schools), and there are good tenants that still want to live there.
Ridley township in general is much more normal with how they deal with landlords. It's just a more expensive area (but Crum lynne and Woodlyn tend to be more affordable though).
Fund Manager · Wayne, PA · Member since 2009 · 1k+ posts · 1k+ votes
9y
Thanks @Leann Lilly! Best of luck. Feel free to PM if you have any more questions that come up.
@Rich O'Neill Thanks, and all good points! I was finding tenants personally in that area per-internet for the most part, but it sounds like you have a good strategy.
Property Manager · Ridley, PA · Member since 2017 · 427 posts · 449 votes
9y
@Dave Van Horn You are so right about Eddystone Borough being anti-landlord. I just settled last week on my 2nd Eddystone SFR with a conditional CO. Of course the list of violations are excessive which in turn increases my acquisition cost. But I will still have decent cash flow once its rented. What areas in Delco would you recommend that could get you the best returns for BRRRR's? Your insight in greatly appreciated.
Fund Manager · Wayne, PA · Member since 2009 · 1k+ posts · 1k+ votes
9y
@Joseph ODonovan Like I mentioned above, I haven't personally invested in the area in years but I always liked Crum Lynne, Folcroft, Clifton Heights, Upland, Trainer, Marcus Hook, Lynwood, Garden City (which is a part in Wallingford), Darby Township (not Darby Borough), and Tinicum.
I used to do parts of Upper Darby too but not sure I would do that today.
Delco's certainly changing, and I'm mixed on the economic growth and development of the area.
Not in Delco, but still local - I should add I do think Wilmington has potential with population growth, and it seems to be more favorable to businesses and landlords. I also like Chester County PA but it's more expensive to renovate and the cashflow isn't usually as high, though the area is nicer - so it's a give and take.
I think it depends on your metrics. I don't want to say you can't make it work for fix and flips but to my point above, Collingdale (and much of Delco) isn't what it used to be.
When I was actively buying there, about a decade ago, I felt that it was a quality area for both Fix and Flips and Buy and Hold. With how economic growth has been in the area lately, I feel it's probably better for a cashflowing buy and hold above all else.
I'd be curious to hear others chime in who have done fix and flips in Collingdale more recently.
Rental Property Investor · Springfield, PA · Member since 2017 · 101 posts · 20 votes
9y
First forum I've read and I'm glad I did. Im looking to start investing and was thinking DELCO (Interboro, Ridley) because I've read your first investment should be close but I see DELCO going downhill and wouldn't mind trying Chester county. I am wrong to think that there are more renters in DELCO than CHESCO though? I always thought finding renters in DELCO would b easier.
West Philadelphia · Member since 2017 · 35 posts · 11 votes
9y
@Justin Seng Welcome Justin. There are definitely rental opportunities in Chester county just as there are in Delaware county. Downingtown and Coatesville immediately come to mind. West Chester as well, but WC is very pricey. Believe it or not, there are rental opportunities around Frazer, Malvern, Paoli, Berwyn, etc. (essentially the towns along the main line from around Exton out to Villanova).
I imagine that up around Pottstown, you can find some rental areas, but I have don't have specific knowledge of that area.
Rental Property Investor · Springfield, PA · Member since 2017 · 101 posts · 20 votes
9y
@Alfred Harrison Thanks Al. I'm still getting used to the fact that people rent in higher end areas. I guess I just always assumed renting was done in lower end areas. Not sure which area I want to dive into. Maybe a little bit of both someday.
Rental Property Investor · Springfield, PA · Member since 2017 · 101 posts · 20 votes
9y
Thanks Al. I'm still getting used to the fact that people rent in higher end areas. I guess I just always assumed renting was done in lower end areas. Not sure which area I want to dive into. Maybe a little bit of both someday.
Rental Property Investor · Springfield, PA · Member since 2017 · 101 posts · 20 votes
9y
@Percy N. I'm just getting into all this but all the people I know that have properties always complain about the management end so I figured best bet is having a PM. Is it difficult to find renters in Chester County? I live in Delaware County and I just feel like it is going backwards instead of forward as far as value. Again that is just a feeling I don't have hard numbers to prove either way. I think I would like less headaches even if it means a little less cash flow.
West Philadelphia · Member since 2017 · 35 posts · 11 votes
9y
@Justin Seng I don't think that you would have much of a problem getting rentals in the areas that I mentioned such as West Chester, Downingtown, Coatesville and along the main line. Of course though, do your own due diligence and continue to talk to people that are actually investing in those areas, etc.
West Chester, PA · Member since 2017 · 12 posts · 4 votes
9y
@Percy N. where in Chester county specifically do you have properties if you feel comfortable sharing? I ask because I am looking at purchasing property in Chester county as well and am trying to get a stronger bearing on what areas to avoid etc. Do you feel the yield justifies some of the headaches you get in the lower price range?
Developer · Philadelphia, PA · Member since 2015 · 2k+ posts · 904 votes
9y
@Jorge Santiago, I have properties in West Chester / East Goshen.
These are higher end rental properties so not much tenant headache other than finding the right tenant when there is a vacancy and understanding that the yields will be lower once you get into the $$200k-250K range.
Investor · Queens, NY · Member since 2021 · 21 posts · 13 votes
2y
@Dave Van Horn what areas would you recommend in PA for an out of state investors? I'm considering collingsdale, chester etc? I'm focusing on quality renter.