Property in Point Breeze

[Ore Aina-Badejo]

Hi everyone,

I'm planning on buying a property in Point Breeze that's about 980 sqft with a 3br 1.5 bath and finished basement. It's listed for 250k but I wanted to pay 220k. Negotiations didn't go so well and so we ended up at 245k with a 5k sellers assist.

The problem now is that rental income for the neighborhood for a 3br is about $1500 - $1600 but my mortgage payment comes out to about $1400.

Is this too close for comfort or do you guys think it's not worth it. We're a bit concerned about the negotiation our realtor did (aka none) and whether or not this is a worthwhile investment. It seems like the area is booming and prices have gone up from 150/sq foot to 250 in less than a year. We are wondering if it's possible that the area is too developed at this point. 

Additionally, we live in NY, so about 2 hours away from the property we want to buy. Any advice would be more than welcome/appreciated!!

[Joseph ODonovan]

@Ore Aina-Badejo A couple of comments. Are you looking for cash flow? or appreciation? If you are looking for cash flow then the answer is easy, don't do it. Did you include vacancy, repairs and capex in your analysis? You will certainly be negative cash flowing. Regarding appreciation, you are taking a risk not just because it's speculative but this particular area of the city is still very sketchy. You are already paying at the highest price point this area has seen and its just a matter of time before prices level out or decline. More importantly, the downtown philly rental supply has been increasing and vacancies are increasing as well. This does not bode well for this type of investment. There are many other areas of the city that can cash flow. Best of luck!