How is philadelphia-rental-market ?

Question

IS it a good place to live and get rental units?   I find it is very cheaper , comparing to tri state areas.

Paulette Midgette · Answer

As of the last census Philadelphia was 48% renters versus 52% homeowners.  That coupled with the fact that Philadelphia has seen a rise in population over the past 5 years, with the large majority of residents falling in the millennial generation.  Philadelphia hands down is a great rental market with low vacancy rates.  With that said, the question is what is your target location and what type of tenants do you want to attract.

I agree that Philadelphia can be a block to block setting when it comes to the condition of the neighborhoods and where you want to live.  But when it comes to rent it is an neighborhood by neighborhood event in my opinion.

As somewhat of a certification.  I was born and raised in Philadelphia and still live in the City.  I am have also been investing in MFHs since 1988.

Account Closed · Answer

@Paulette Midgette Most of my information is obtained on an MSA basis across the country. This gives me a better indicator of whats going on in that area of business rather than city specific. The website I go to for obtaining this is https://www.census.gov/housing/hvs/data/rates.html. From my experience of underwriting and managing 18 different markets on a national basis for a large apartment developer their are a lot of metrics that are important to keep in mind besides just this metric of course. Diving into specific info on a city or more detailed geographic tends to be a harder process. I'd defiantly be very skeptical about where the information is coming from and how it was obtained if it wasn't pulled directly from the Govt. My experience has been primarily focus on apartment complexes over 100+ so my perspective for looking at evaluating areas is going to different than what you'd do to look at a SFH or small Multi-family for a deal. Seems to be that you're definitely looking to stay informed of market data thats very important. Let's connect, I'd love to learn more about your experience and what you're currently doing

Paulette Midgette · Answer

Awesome Account Closed, I appreciate the information.  Knowing about your background and experience, I certainly understand where you going from and it makes sense for a larger scale investor.  I am still in the toddler stage, I think. :-).  Yes, Matt would love to connect!  Look for my friend request.

Paulette Midgette · Answer

Hi Account Closed, I can't give you data vacancy rates are in Philly.  But I have owned rentals in the City since 1988.  I have properties in Center City, Northeast Philly, and University City.  For the past 6 years I have never had a unit vacant more than 3 weeks.  I probably could filled them quicker but I like to take my time turning my units.  I am also hearing the same from area investors, in addition to publications about the subject here in Philly.  Encourage you to do your research and come to your own conclusions.

Matt do you currently hold in rentals in Philly.  What is your experience with vacancies?

Paulette Midgette · Answer

Hi Account Closed, what is your price range and what are your investing criteria.  Unfortunately, I think competition is the beast that is stalking us all.  Competition drives up the price and that is what we are seeing now.  I believe the home prices in Philly are artificially inflated right now because of said competition.  However, I do believe we will start to see a price correction within the next year.  PM me and we can discuss further.

Account Closed · Answer

Hi, Paulette. I have been following your posts and you seems like very knowledgeable and experienced investor. Could you recommend any specific zipcodes that you think are suitable for new investors. We are interested in small MF. We live in NE Philadelphia and the prices and competition is CRAZY here.

Moises Mari · Answer

Hi @Etahn Smith!  I had a similar question a few years ago when New Jersey prices started rising and I found myself having to save for longer to come up with enough of an investment to purchase investment properties in the Essex County, Bergen County areas.   If you are sorely considering this because of the lower property values I would consider the following points.

As I manage my own rental properties, I have a hard time getting comfortable with owning rentals hours away from my reach. I would weight in the risks of owning properties away from your home base. Whether is the added property management fees, or the lack of access to inspect repairs on your own which could potentially increase your repair expenses as you wouldn't be able to see exactly what's wrong with a repair and allow you to hire a good contractor that won't over charge you for a simple repair.

Secondly, I must add that even here in Northern New Jersey, there are still some areas that could still net you a good return. Many people here in Biggerpockets will point towards Newark, NJ to get to the return numbers a lot are looking for.  I personally own rentals in Newark and can say you can net good numbers there, of course, you have to do your due diligence to find the good deal.  I personally decided to stay away from out of state investments. However, there are also several people doing amazing things investing in out of state markets. It all has to do with your comfort level and being able to develop a great team wherever state you decide to invest in to save you from headaches when you need them.

Best of luck deciding! Happy investing!

Account Closed · Answer

@Paulette Midgette Our Home Ownership Rate in the Philadelphia Metro area is actually a little bit higher than that. Right now, on the 2016 Census HOR was 58.37% but has been steadily declining YOY ever since 2010 where the HOR was 70.70%.  As far as rental vacancy, we are actually above the national which is at 7.2% for Q1 of 2017 compared to Philadelphia Metro which was 7.9%. Our Philadelphia market overall tends to be a very interesting market and can have low vacancy rates but that is segmented into individual classes of the rental market.

Account Closed · Answer

@Etahn Smith @Kevin N. is right Philadelphia can be a Block x Block key of city. If you're interested in finding areas to target that you'd want to live in and also be able to rent out, let's connect. I'd be open to discussing your best options

How is philadelphia-rental-market ?

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