2% Rule in Greater Philadelphia Area

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2% Rule in Greater Philadelphia Area

David Lorenz
Plymouth Meeting, PA · Member since 2019 · 34 posts · 12 votes

Hello!

I'm in the process of looking for my first multi-family rental property (2-4 units) in the greater Philadelphia area. As I'm running the numbers I'm not getting anywhere near the 2%. Instead, the math is typically coming in closer to 1%. I know it's just a rule of thumb, but Is it possible to obtain the 2% in the Philadelphia market? Or have I just not found the right deal yet?

Dave

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  • Russell BrazilBusiness Member
    Moderator
    Real Estate Agent · Washington, D.C. · Member since 2012 · 17k+ posts · 30k+ votes
    7y

    You wont find any high demand metro area with ratios that high. Yield is a function of risk, so to find that sort of yield you need to look to much lower demand markets.

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  • Frank Geiger
    Rental Property Investor · NC · Member since 2018 · 776 posts · 776 votes
    7y

    Sounds crazy but MFHs seem to sell at a premium in Philly. There are pockets of SFH opportunities if you look around. On the outskirts of some rough areas you can find higher returns like the 2% mentioned.

    Speaking from experience, I wouldn't buy there again.

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  • David Lorenz
    OP
    Plymouth Meeting, PA · Member since 2019 · 34 posts · 12 votes
    7y

    Good to know. Thanks!

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