Philadelphia’s real estate market has boomed over the past decade. Many neighborhoods, such as Brewerytown, have completely shifted in terms of real estate values. This is partially due to new job growth in Philly over the past 10 years. Additionally, developers have taken a keen eye towards investing in Philly’s real estate. You will see new construction throughout many of the Philadelphia neighborhoods, which is helping drive the real estate values. We usually see a new Philadelphia home buyer come into the market every week. However, there are still certain neighborhoods that aren’t quite there in terms of appreciation. Let’s take a deeper look into where we buy houses in Philadelphia, PA.
The Criteria Used When We Buy Houses in Philadelphia
The City of Brotherly Love have shown its economic strength by flexing its real estate muscles the past few years. Many neighborhoods have seen positive appreciation, while also offering positive cash flow if rented correctly. A neighborhood like Nicetown-Tioga has not experienced the full boom compared to somewhere like Chestnut Hill, but real estate professionals speculate that it has the potential to take off over the next several years. The primary criteria we use when we buy houses in Philadelphia consists of these two factors:
- Positive cash flow from the property
- Future appreciation
Now, these are not deal breakers if we cannot achieve both of these milestones in one purchase. Our team considers cash flow to be more important because we prefer to have the monthly expenses of the house covered by the monthly rental income. If the expenses are covered, and we can earn a small amount of income on top of that, there is a good chance we will buy the house. Mount Airy is a neighborhood that Brotherly Love Real Estate has considered recently for our next property purchase. Remember, our goal is to have the rent be higher than the expenses of the property. Here is an example of the quick numbers from a house we bought in Philadelphia last year:
- Rental Income: $2500
- Mortgage: $1000
- Other Monthly Expenses: $800
- Total Positive Cash Flow: $700
This home is located in Allegheny West, which is directly north of Brewerytown. The positive monthly cash flow for this place is around $700 per month after all the expenses are covered. The building can support itself with the rental income it generates. Our team also presumes this zip code will appreciate in the future. Investments like this is the reason we buy houses in Philadelphia. There is an opportunity around every corner!
We Buy Houses in Philadelphia in Most Neighborhoods
Philadelphia is the 6th largest city by population in the United States. It is easy to get ‘shiny object syndrome’ and want to buy houses in every single neighborhood throughout the city. While there are plenty of great investment opportunities out there, not every neighborhood is right for real estate investing. For example, certain cities can work well for a quick house flip, but don’t make as much sense for a long-term rental. Not to mention, Philadelphia is very street-by-street. This means that every though your property is in a ‘good zip code’, that does not mean it’s a good investment. It comes down to the street, and the microeconomics of that area. Here’s a short list of neighborhoods where we currently avoid buying houses in:
If you are new to investing in the Philadelphia real estate market, consider these two incredibly hot neighborhoods: South Street & Point Breeze. They offer great returns and have their own unique style compared to other neighborhoods. They have character!
Please reach out to us at any time if you have specific questions on the Philadelphia real estate market, certain neighborhoods, or a house of your own that you are considering selling. You can call 215-769-9875 for an immediate cash offer if you need to sell a house fast. We look forward to hearing from you.
Regardless of where you live in Philadelphia, we can help you with your property. If the two words that you thought were sell home, click here to learn how we can help you. We buy houses as is, which means you don’t have to do any repairs before selling it.