Questions about Philadelphia Market for LTRs

[Sakshum Kulshrestha]

Hi everyone! I'm 23, and I'm looking to purchase my first rental property this year. I am strongly considering Philadelphia as a market to invest in OOS because I was raised in Jersey and I used to be familiar with neighborhoods in the city; I understand things have changed over time, however. I'm looking into SFHs in the 250-320k range. As I look into the market and start to build a team I had a few questions:

1)  How difficult is it to get and keep a rental license OOS? I understand I'd have to be local for some appointments, but are these visits generally infrequent/painless?

2) I'd like to target B class properties, but I've read about significant  apartments added in these areas. How do SFHs fare in competition with these rentals as supply increases?

3) What neighborhoods would you recommend in this price range if I'm targeting high quality tenants? It seems tough to find even mediocre cashflow on turnkey properties, and I'm currently looking into Fishtown/Olde Richmond, and Point Breeze, but areas like Germantown are compelling also.

4) How seriously do local investors take projects like the Bellwether project? Do you factor them into your neighborhood selections or do these projects tend to fizzle out in Philly?

[Dominic Mazzarella]

Getting a rental license as an out-of-state investor is doable, but you’ll need to manage inspections and compliance. A local property manager will make this much easier and handle the visits for you.

Single-family homes can still do well, even with more apartments popping up, as they cater to tenants who want privacy and space. Fishtown and Point Breeze are strong options but can be pricey. Germantown has better cash flow potential but may require more hands-on management. Brewerytown and East Passyunk could also be worth exploring.

Big projects like Bellwether can boost neighborhoods, but they often take time to show results, so don’t count on them as a main factor.