Investor · New York City, NY · Member since 2017 · 146 posts · 56 votes
I'm deeply considering getting my first rental property in Philadelphia. I really love the city, it's low property tax rate, and some of the gentrification happening in all corners of the city. My goal is to invest in rentals with minimal rehab needs and create strong cashflow. At worst, I'd hope for 8% ROI after expenses including Property Manager fees.
I guess, my question is what are people's experiences thus far investing in the city in regards to finding strong cashflow? I've been looking at the Frankford, Point Breeze, and Kensington areas mostly. Brewerytown and Fishtown look over-valued for what I see on the web right now.
I found some intriguing deals near University City, but the homes look very old and need a lot of work on both interior and exterior. I did also see some deals in the Kingsessing neighborhood, but I'm not familiar with that area and if gentrification is happening there (I'm trying to avoid being a slumlord).
West Oak Lane, Mt Airy, and spots of Germantown is probably my favorite place in the city to find rentals for investors. Plenty of single family inventory that you can purchase between $50k-100k, Very consistent rental rates around $1500 monthly, if you are will to make it look a little nicer than whats on the block, also gives you a better quality tenant.
Feel free to reach out if you'd like to check out some of my inventory!
You will be hard pressed to find what you are looking for.
I'm not sure you'll get the ROI you are looking for without exposing yourself to risk. The gentrified areas are too expensive to get your ROI. Especially if you are looking for turn-key. Check the MLS, do the math, and crunch rent numbers you won't get there.
Other areas are largely speculative and yes.. “slummy”. Frankford and Kensington are realistically where you could get your returns, but quality of the property and tenants isn’t there. So expect work, higher turn over, and unforeseen costs. It will be harder to calculate cleaner numbers there. The upside is maybe the areas gentrify, but I’d recommend driving by to have a look for yourself.
On Frankford- maybe I am biased because I just bought a place there but there are some streets that definitely show signs of being "up and coming" although I will agree with the group consensus that it is on a block by block basis.
There seem to be signs of new constructions, parks and green spaces and a lot of families walking around the area, in SOME parts of Frankford, and the average rents compared to the purchase price of some of the properties leave room for a higher vacancy rate in your budget, and for you to be more picky in finding the right tenants.
A lot of older homes so definitely would suggest leaving room in your budget for improvements. It's too early for me to fully comment on cash flow but I definitely think the potential is there, looking at the numbers.
West Oak Lane, Mt Airy, and spots of Germantown is probably my favorite place in the city to find rentals for investors. Plenty of single family inventory that you can purchase between $50k-100k, Very consistent rental rates around $1500 monthly, if you are will to make it look a little nicer than whats on the block, also gives you a better quality tenant.
Feel free to reach out if you'd like to check out some of my inventory!