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Updated 7 months ago on . Most recent reply

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86
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Isadore Nelson
19
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86
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Thoughts On Buying A Rental For 60 K In Philadelphia?

Isadore Nelson
Posted

Good afternoon, I am a first-time investor looking to get started with my first property. 

I've for over a period of 2-months been looking at properties in the cheapest neighborhoods in Philadelphia, namely those within the 19134 zip-code. It seems that properties in the area can range on average from 50k-75k. I'd like to acquire one for say 60k with a 20% down-payment of 12k. Monthly mortgage payments including insurance and tax would be around $475 while the rent would be around double that, leaving me with a monthly cash-flow return of about $500. 

Is this a reasonable expectation and a good option?

I'd love to hear any of your feedback, thank you!

Most Popular Reply

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Eric Gerakos#3 Market Trends & Data Contributor
  • Investor
  • Costa Mesa, CA
770
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556
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Eric Gerakos#3 Market Trends & Data Contributor
  • Investor
  • Costa Mesa, CA
Replied

Isadore, the primary flaw in your idea is a common one among new investors. You overlook the most basic rules of supply and demand. Have you asked yourself WHY are the properties so cheap? And what kind of tenant is going to live there? They are cheap because they are undesirable and will attract crappy tenants. Instead of the cash flow you see on paper, you’re looking at high vacancy, high maintenance and no cash flow. Cheap properties are usually no bargain. Best of luck to you.

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