Rental Demand Philidelphia?

[Isadore Nelson]

Good afternoon, I've been exploring options to acquire a property for long term rental in the Philidelphia area. 

I have found some options which seemed ideal in sync with the BRRRR method, however from looking on sites like Zillow and Redfin, there just seems to be so many available options, for nice rentals and good rates, so would it even be ideal to buy in the area if it would be so difficult if even possible to find a tenant? What are the chances I'd be stuck with a vacant apartment?

I'd appreciate any insight or leads.

Thank you!

[Stuart Udis]

@Isadore Nelson There is currently a glut of new housing that will take some time to absorb in specific neighborhoods but certainly not something impacting the entire city. The 19122, 19123 & 19125 zip codes stand out as neighborhoods currently experiencing this issue. It is also easy to understand why. These neighborhoods have had favorable zoning for a number of years and development usually follows the path of least resistance.

Keep in mind prohibitive zoning is a leading barrier of entry and is usually why neighborhoods lack new supply even when the underlying fundamentals and demand are strong. This is a trend you will observe across the country, not specifically in Philadelphia. It is also why such neighborhoods are most likely to appreciate because those who own properties in these neighborhoods are on the correct side of the supply/demand equation.

Since your post is focused on Philadelphia, the city has good fundamentals...strong Ed's & Med's, good accessibility to both NYC & DC, own port, international airport etc. These are all reasons to believe the neighborhoods that experienced the largest spike in new housing will effectively absorb the supply that was built in recent years. In the meantime I would focus on other neighborhoods. I personally invest heavily in northwest, particularly the 19119 zip code for the exact reasons I noted. The neighborhood has some of the most prohibitive zoning and strong demand, exactly the combination that leads to good absorption.