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 If the numbers make sense for a buy and hold property at that location, I don't see why not. You could end up having a house on a desirable block. Where exactly in Roxborough are you looking?
Hi @Richard Jahnle . Thanks for the response! Originally, we (my SO & I) were thinking near the Roxborough/Manayunk border. We live in Roxborough and love it, but we don't really think there are too many deals in this neighborhood. Now, we are thinking about going to one of the middle neighborhoods, like Tacony. We also thought about Grays Ferry, but know we will likely have to pay a premium to get in there. Since this is our first go at it, we want to keep it simple.
Where have you invested in Philly? Do you prefer certain neighborhoods? Would love to hear about your experience.
Not in Philly but I've heard that several neighborhoods there have been changing.
When you see people developing large more expensive properties it's usually a good indication there is demand from high income people .
I've seen this in L.A where there are many newer large homes and then you'll see an older home that is smaller. Those expensive sales help to bring up the value of the smaller homes .
Could be a good opportunity to buy and rent it out for cash flow and perhaps sell later on to a developer or redevelop later on .
Just curious how much are the smaller homes in the area ?
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.
@Sabrina Romano I would love to guide you as to where you should invest in for a long term rental. My focus would be on cheaper PP and Higher CAP but with a area that in C or C- looking to transform into a B or B-. PM me I'd love to connect!
@Sabrina Romano I house hack a duplex in Roxborough near the intersection of Monastery and Ridge ave, so pretty close to that Manayunk/Roxborough border. I agree with you, it's hard to find a cash flowing deal in Roxborough, at least on the MLS. If I were to find a deal in Roxborough that would be great since I am familiar with the area, but I may look outside of it like you. Maybe Germantown or Mt. Airy, areas where there is a better chance of cash flow in the present, and (hopefully) appreciation in the future.
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.
Interesting. It does really sound like there is opportunity in an area like that just from what I've seen in the L.A market.
The cheapest place one can buy here now is about $400,000 that would be for a bad area and a house in bad shape. Even if you go far out.
Neighborhoods have gentrified and the prices have really gone up. People get priced out of the hot area..then the area next to it becomes hot.