Investor · NC · Member since 2020 · 30 posts · 30 votes
I have 40k saved up and want to purchase a multifamily home in Pennsylvania to house hack. I am currently working on getting pre approved but was wondering what people’s thoughts are in investing in Philadelphia or should I go to Allentown?
If you’re set on investing in PA, have a look at the Harrisburg/Carlisle area as well. That area is growing dramatically (my office is in the area) and consistently shows up in the top 5-10 areas for rent growth.
@Arun Dharan hey man, I househack a triplex in the suburbs of Allentown. I think there's plenty of opportunity from Philly to Allentown, you just gotta set up alerts through Redfin, Zillow etc. for when stuff hits the market that might fit your criteria. If you're going FHA, I say the bigger the better
I'm a newbie to REI, but I lived in Allentown from 2001-2019, now live about 40 mins north. Allentown has some very rough areas, but wonderful areas as well, just like any metro area. Allentown is the 3rd largest city in PA, and it is the largest city that makes up what is called the Lehigh Valley. (https://en.m.wikipedia.org/wik...
I say all of that because the Lehigh Valley is a growing area. The areas surrounding Allentown are very safe. Bethlehem is a very trendy town, some people are saying that trend might be developing in Nazareth also. Easton, just along the border of NJ has potential, but also some extremely rough areas as well. Whitehall is where a lot of the largest shopping centers are located, including the mall. The Lehigh Valley has route 22 where the Lehigh Valley International Airport is located off of (22 and Airport Rd.) and interstate 78 runs close by which is a major route to NJ and NY. Add to that the PA turnpike northeast extension which will take you to Philly.
There is a lot of warehousing that is being built all around the Lehigh Valley because of those major highways, it has become a huge shipping hub. And its economy still grew in 2020 despite the strict lockdowns the Governor of PA mandated.
Welcome to the exciting world of real estate investing. House hacking is a great way to get started.
Regarding the market, my team has recently conducted analysis of the top markets for investing in small multifamily properties to rent out, and Philadelphia is a good location for this strategy. Our data shows a city-average cap rate of 3.2% for small multifamily rentals such as duplexes, triplexes, fourplexes, etc. (the ideal type of properties for house hacking). While this return might seem modest, it's actually really good for a city-wide average. You can find individual properties which offer a double-digit return.
Moreover, the median property price for small multifamily properties is $438k, which fits well within your budget for house hacking as you don't have to worry about a 20% down payment which is required for a conventional mortgage when buying an investment property to entirely rent out.
Good luck and please let me know if there's anything else I can help with.
@Arun Dharan Welcome to the community. I will say if your looking to house hack a multi you better have patience. I always compare finding a good multi in philly to finding a unicorn. While they do exist, there is the added level of complication because you want to live in it as well and they generally means a higher standard of living for yourself.
My recommendation would be to look in Delaware County, the multi inventory is significantly higher, are typically in better condition, and always have less title issues than philly properties.
I agree with @Kunal Mishra in some of his descriptions of the areas. I would add Northern Liberties to the areas where appreciation is occurring.
I can certainly shed some more light on the areas of philly or delco if you'd like. Would love to connect.