Question for Philadelphia investors - is the population shrinkage impacting you?

[Elizabeth Rose]

I'm thinking of doing some BRRRRs in Philly but notice that the population has been shrinking since 2020. BP has a great article on this here: https://www.biggerpockets.com/blog/philadelphia-real-estate-market. Apparently, the Philly population has shrunk down to where it was in 2014.

If you have rentals in Philly, I'm curious if you've had trouble finding good tenants and/or getting the rents you want? Do you find it's taking longer to fill a vacancy? 

Housing prices are low but if there's too much inventory and a shrinking pool of renters, I'd be concerned about vacancy rates and cash flow. Thanks in advance for any insights!

[Stuart Udis]

Philadelphia is a large city and you shouldn't categorize the entire city based on this statistic. I believe the biggest issue many landlords currently face is the over supply of new housing that was rushed to the market due to a number of factors including the changing  tax abatement legislation and favorable financing terms that were available when these properties were first purchased. Many of the recently constructed buildings are the result of these factors are just now coming on line but this disproportionately impacts certain neighborhoods. If you are going to invest in the neighborhoods with a lot of supply, it's important differentiate your product as tenants have quite a bit of optionality. My best advice would be to identify housing needs that are not being met by the current wave of development. If you can identify a need and it happens to be in a neighborhood with more restrictive zoning, that is a recipe for success. Keep in mind the reason why most of the new development is concentrated in certain areas of the city is due to favorable zoning. Zoning bills are frequently passed to promote new housing and development but there are plenty of neighborhoods in Philadelphia that have seen a rise in demand where the the zoning is more restrictive.