I am trying to come up with a strategy of identifying areas around Philly where I can get a higher cash flow on single or townhomes based on the following characteristic.
1. low taxes
2. higher rents
Can you tell me based on your experience what areas in Philly have met your criteria on higher cash flow and why? Are there any other factors you guys consider in deciding a property or location that can come up with a higher cash flow.
@Buyan Thyagarajan all depends on how risky you're willing to play it... Highest rent compared to lowest taxes by a mile would be Chester City where I've seen property taxes as low as $60/year, oftentimes hovering in the $100s. You can rent for anywhere from $1000/mo up to $1600/mo depending on the square footage, bedroom/bathroom, attached vs semi-detached, level of finishes and whether or not you rent to Section 8 tenants. Other similar areas in the city of Philadelphia can have similar rents with somewhat higher property taxes ($300-$700/year) with key locations having higher section 8 rent compared to market rent.
Other areas of Delaware County will get you with higher property taxes ($2000-$5000/year) due to nicer school districts though the rent is not significantly higher. Higher property taxes generally tend toward safer investments with overall better tenants but if you're willing to take the risk you can cashflow much more in said lower end areas.