Has the 50% rule or 2% rule worked for you in Philly?

4 Replies | Philadelphia, Pennsylvania

Hi All,

I am interested in investing in a rental property in either Philadelphia or it's surrounding suburbs. I am still in the learning period (reading books, going on this forum, articles, etc.) and have not yet pulled the trigger on a property yet. As I was reading the BP book on Rental Property Investing, I started wondering whether the 2% or 50% rule actually works for this area? Or if these rules don't work, is there a "rule" out there that can help with filtering out potentially good deals?

Thanks!
Patrick

No -  the 2% rule doesn’t work. If the rules DO work you’ll find yourself in the worst parts of the city. 

I would recommend you crunch numbers available from Redfin and Zillow to get a gauge on rental numbers and costs to buy real estate In philly.

@Patrick Duque Start studying the cap rates. What actual return do you want on your investments? 

Do you want a property that act like a bond or stock? low risk- low return or high risk - high return or something in the middle? 

Once you figure out that number, are looking to force appreciation($10,000+) or buy something close to turnkey($5,000-$8,000 for cosmetic move in ready)