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October 26, 2018

To Invest Or Not To Invest: Philadelphia Real Estate Market

The big real estate investing question this year is not whether to invest in real estate, but where to invest in real estate.

There has never been a better time to buy a real estate investment. But with all the hottest markets in the current housing market being paraded in front of you, which one should you choose?

The Philadelphia real estate market 2018 would be a smart choice and a safe choice for real estate investing this year.

The truth is, while those hot real estate markets can have some of the best real estate investments, they are also usually the most expensive real estate investments. Add in the competition from real estate investors and homebuyers alike, beginner real estate investors will have trouble breaking into such housing markets.

When it comes to the Philadelphia real estate market 2018, it’s a somewhat different story. Let us tell you the real estate investing story of Philadelphia.

Philadelphia Real Estate Market 2018: The BackStory

Philly’s Economy

You probably haven’t heard much about the Philadelphia real estate market 2018, its economy or much else for that matter. But, believe it or not, that can be a good thing for a real estate investor. It’s simply because it can be a sign of stability, one of the best things for successful real estate investing.

No one’s saying the economy of Philadelphia is soaring nor are they saying it’s something Philadelphia real estate investors should worry about. Instead, know that when you invest in Philadelphia real estate, you’ll be surrounded by an economy that is growing, slowly but steadily. This makes for a low-risk Philadelphia real estate investment with the potential to greatly appreciate as the surrounding location experiences growth.

Philly’s Job Market

Addition of jobs is, of course, a major factor in the growth as well as the key to the rising demand for Philadelphia investment property. In 2017, the rate of job growth in Philadelphia was actually faster than that of the national rate.

Even with a fast-growing job market, a Philadelphia real estate investor might be wary of the high unemployment rate of 6.2%. Although much higher than the national unemployment rate, it is declining more than anywhere else in the country. This means things are improving in the Philadelphia real estate market 2018.

As real estate investors know, a location with obvious signs of improvement and growth make for the best places to invest in real estate. This is due to the fact that Philadelphia real estate prices are affordable compared to everywhere else in the current housing market and are likely to see some real estate appreciation as the city improves more and more.

Philly’s Population

Because of this growing job market, the Philadelphia real estate market 2018 enjoys steady population growth. Just another box to tick in the checklist for the best place to invest in real estate. This population growth furthers the positive trends of the economy, mostly because of the large influx of residents that are more educated and wealthier.

Why the BackStory Matters

Keep in mind that while the backstory doesn’t paint an ideal picture and the Philadelphia real estate market 2018 can’t boast all kinds of titles and rankings, it’s heading in the right path. This means great things for a Philadelphia real estate investor who buys investment property right now. The future of the Philadelphia real estate market 2018 and beyond is a bright one for sure.

 

Philadelphia Real Estate Prices: The Plot Thickens

Let’s continue our real estate investing story with Philadelphia real estate market trends. These are significant, of course, to know before you decide to invest in Philadelphia real estate.

 

Philadelphia Real Estate Market 2018: The Stats

Median Property Price: $243,672

Traditional Rental Income: $1,310

Traditional Cash on Cash Return: 2.59%

Traditional Cap Rate: 2.59%

 

Philly’s Real Estate Prices

This is where the plot thickens in the Philadelphia real estate market 2018. A report from Philly.com earlier this year for the reassessment of Philadelphia real estate prices reported a jump of 10.5% in the median property price. Every Philadelphia real estate investor was stunned, as this reassessment comes along with property tax hikes. With the 10.5% increase, it’s likely taxes would increase somewhere between $500 and $1,712.

While these facts might deter you from investing in Philadelphia real estate, local authorities are doing their best to deal with the situation. A bill came soon after that proposes that the City Council should be able to control Philadelphia real estate assessments in the future, preventing unnecessary tax hikes. In other words, the City Council is doing its best to remedy the situation for Philadelphia real estate investors and residents alike.

Despite the fear of higher taxes on investment property, real estate appreciation can be a good thing. If you buy now, Zillow predicts that Philadelphia real estate will go up 5.1% as the year continues. Luckily, this is the kind of real estate appreciation that makes it relatively possible to enter the Philadelphia real estate market 2018 and eventually sell an investment property for a good return on investment.

Philly’s Housing Inventory

The housing inventory in the Philadelphia real estate market 2018 is currently tight. This would explain the Philadelphia real estate market trends with the rising prices. But for 2018, a lot of new real estate development is in the works, especially for multi family homes. Single family homes, on the other hand, will continue to give Philadelphia real estate investors fewer options due to tight inventory, even with new construction plans.

Airbnb Philadelphia: The Subplot

The Philadelphia real estate market 2018 is Airbnb-friendly. Airbnb is legal in Philadelphia while other major cities continue to battle Airbnb or enforce strict regulations on these investment properties. Airbnb Philadelphia welcomes real estate investors with open arms.

Airbnb Philadelphia: The Stats

Airbnb Philadelphia Rental Income: $920

Airbnb Philadelphia Cash on Cash Return: 1%

Airbnb Philadelphia Cap Rate: 1%

With an Airbnb occupancy rate of 67% and general short term rentals having reported record occupancy rates in 2017, Airbnb Philadelphia is a great choice for real estate investors in this housing market.

The Best Neighborhoods in Philadelphia for Real Estate Investing

Interested in investing in Philadelphia real estate? You should be. The Philadelphia real estate market 2018 is only getting better and better with time. Even with Philadelphia real estate prices on the rise, they are relatively affordable compared to other popular real estate markets but still offer a great return on investment.

Of course, this return on investment will only come in the best neighborhoods in Philadelphia. Because some Philadelphia neighborhoods are experiencing drops in real estate prices, high crime rates, and loss of population, a Philadelphia real estate investor really needs to be able to differentiate the best neighborhoods in Philadelphia from the not so great ones. Always be sure to check on such facts before investing in Philadelphia real estate

Old Kensington

  • Median Property Price: $439,999
  • Traditional Rental Income: $1,583
  • Traditional Cash on Cash Return: 1.87%
  • Traditional Cap Rate: 1.87%
  • Airbnb Rental Income: $2,876
  • Airbnb Cash on Cash Return: 4.77%
  • Airbnb Cap Rate: 4.77%
  • Airbnb Occupancy Rate: 57.57%

Greenwich

  • Median Property Price: $259,900
  • Traditional Rental Income: $1,549
  • Traditional Cash on Cash Return: 3.23%
  • Traditional Cap Rate: 3.23%
  • Airbnb Rental Income: $1,814
  • Airbnb Cash on Cash Return: 4.3%
  • Airbnb Cap Rate: 4.3%
  • Airbnb Occupancy Rate: 43.52%

West Poplar

  • Median Property Price: $502,000
  • Traditional Rental Income: $1,715
  • Traditional Cash on Cash Return: 1.32%
  • Traditional Cap Rate: 1.32%
  • Airbnb Rental Income: $2,820
  • Airbnb Cash on Cash Return: 3.37%
  • Airbnb Cap Rate: 3.37%
  • Airbnb Occupancy Rate: 51.86%

East Poplar

  • Median Property Price: $614,900
  • Traditional Rental Income: $1,730
  • Traditional Cash on Cash Return: 0.95%
  • Traditional Cap Rate: 0.95%
  • Airbnb Rental Income: $3,061
  • Airbnb Cash on Cash Return: 3.19%
  • Airbnb Cap Rate: 3.19%
  • Airbnb Occupancy Rate: 50.28%

East Passyunk

  • Median Property Price: $332,500
  • Traditional Rental Income: $1,635
  • Traditional Cash on Cash Return: 2.41%
  • Traditional Cap Rate: 2.41%
  • Airbnb Rental Income: $1,792
  • Airbnb Cash on Cash Return: 2.89%
  • Airbnb Cap Rate: 2.89%
  • Airbnb Occupancy Rate: 44.64%

Dickinson Narrows

  • Median Property Price: $329,900
  • Traditional Rental Income: $1,863
  • Traditional Cash on Cash Return: 2.73%
  • Traditional Cap Rate: 2.73%
  • Airbnb Rental Income: $1,720
  • Airbnb Cash on Cash Return: 2.4%
  • Airbnb Cap Rate: 2.4%
  • Airbnb Occupancy Rate: 43.95%

Graduate Hospital

  • Median Property Price: $479,900
  • Traditional Rental Income: $1,873
  • Traditional Cash on Cash Return: 1.92%
  • Traditional Cap Rate: 1.92%
  • Airbnb Rental Income: $1,952
  • Airbnb Cash on Cash Return: 2.11%
  • Airbnb Cap Rate: 2.11%
  • Airbnb Occupancy Rate: 45.26%

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