Invest in a small, old home that has new, large homes around it?

[Sabrina Romano]

Hi! I am new to the forum. I am looking to invest in the Roxborough neighborhood of Philadelphia. There are a few blocks that are being developed with what seem to be over-improved houses (large town homes listed at over $500,000, with parking, rooftop decks, etc). Is it a good idea to purchase an older, 2-story row home among all of these large, 4-story town homes?

My goal is to renovate the property and rent it out. I am not interested in a flip right now. Thank you for your tips in advance!

[Sabrina Romano]

Thanks for the insight @Joseph M. Very helpful! As I am sure it is in other cities, the price of the home really depends on the neighborhood you're in. I'd say that if you buy in Roxborough (the city calls it an economically healthy neighborhood about 20 minutes outside Downtown), you could get a rehab for about $110k at least (a 1,000 sq ft home), a turn key (also 1,000 sq ft) for about $160k+. Or you could purchase a newly developed townhome at about 3,000 sq ft with garage and roof deck for between 400k and 700k. The prices really vary over here. If you went to a "middle neighborhood," like Tacony (B- C+ class) where there is less access to Downtown, and not too many business or jobs, prices drop, and there are no lots being developed. The city is focusing on revitalizing the middle neighborhoods, so maybe the developers will come within the next decade. It is hard to say.... You could also go to a D class neighborhood, and get a house for less than 20k, sometimes even less than 5k. It would be a complete gut job though.