Rental property investments carry far-reaching potential. Purchasing an investment property can offer you a way to make extra income and invest in something that appreciates over time.
As the largest city in Pennsylvania, Philadelphia offers plenty of opportunities for real estate investors. This city ranks as one of the most affordable places in the nation to buy a house.
And with a high percentage of renters, the need for rental units keeps growing. This makes Philadelphia one of the best places to invest, whether you’re a beginner or an experienced investor.
If you are a beginner, it can be useful to look to local experts for advice on how to make the most out of your investment.
In this article, TrustArt Realty will cover some things to consider before you buy an investment property in the city of Philadelphia. With a little bit of guidance, you can learn how to get the most out of your rental property purchase.
About the Philadelphia Real Estate Market
Philadelphia’s real estate market is ever-growing and offers plenty of investment opportunities for homeowners looking to expand their portfolios. However, the housing market in this city is also rather competitive. Philadelphia houses up for sale have a wide number of interest buyers and are sold in less than two months.
Although buyers face a limited number of options, with homes selling quickly, there are plenty of investment opportunities in the city of Philadelphia. What’s more, there’s a strong need for rental homes at every income level.
5 Tips for Investing in Philadelphia Real Estate
1. Find Properties in Your Price Range
The Philadelphia real estate market is currently experiencing a steady rise in home values. Although it remains above the national average, buying a rental property in this city can be a big investment.
Philadelphia offers potential investors plenty of options for types of property to invest in. You can find everything from single-family rowhouses to luxury condos and apartments. Your available budget will be the biggest factor that influences the type of property you can invest in.
When researching your budget, you need to think about other fees that may be involved with owning the property, like relevant taxes or insurance. There are more costs associated with purchasing and owning a rental property than just the down payment and mortgage.
2. Research Different Neighborhoods
When you’re buying an investment property, it’s important to do some research beforehand. Learning more about the city you’re investing in is key. There are many different neighborhoods in Philadelphia, so it can be hard to decide where to start investing.
Start by understanding how the market is behaving right now. See how much rent comparable rentals have incurred in the previous months. Moreover, you should aim to predict where the market will head in the future.
You can do this by browsing online to see whether there are major developments underway. For instance, new educational facilities, infrastructure, and real estate projects are indicators of potential future growth.
Additionally, you should research areas that have the highest rent payment to purchase price rate. This will help you maximize your ROI significantly.
3. Consider Hiring a Professional Property Manager
Buying a rental property comes with a lot of responsibilities. At the very least, your Philadelphia rental property needs to remain habitable. That means taking care of consistent upkeep and other maintenance requirements. You also need to be ready to deal with property emergencies and tenant disputes.
If you decide to be a self-managing landlord, you might find yourself spending all your free time working with tenants and solving problems. If that sounds stressful, you might want to think about the benefits that hiring a professional property management company could offer.
A solid full-service property management company will take care of all of the day-to-day responsibilities and make sure your tenants are safe, comfortable, and happy.
4. Do the Math
Buying an investment property in Philadelphia is a big investment so you’ll need to do a lot of math before you sign anything related to the property. Consider multiple different scenarios to determine how various situations would impact the potential return on your real estate investment in Philadelphia.
Remember to be conservative with your estimations. If you think too broadly or fail to consider certain factors, you might end up charging too little in rent to cover your expenses.
The opposite is much better. When you male conservative projections, experiencing higher returns, property appreciation, or other positive developments simply provide pleasant surprises.
5. Improve the Rental Property’s Curb Appeal
Once you have the property, you need to get it ready to rent. You also want to make sure it looks attractive to potential renters. Here are some exterior improvements to consider:
- A new coat of paint. A simple paint job can significantly increase your rental’s appeal.
- Invest in new hardware. Changing standard hardware like the light fixtures, house numbers, and mailboxes can go a long way to give the property character and shine.
- Deal with repairs. Once you’ve acquired your investment property, make sure to inspect it to spot issues before it’s too late. Taking care of repairs early on can save you a lot of time and money in the future.
- Offer amenities renters want. Amenities can greatly improve the value of your rental property. After all, most renters are willing to spend extra for convenience.
- Emphasize what makes your property unique. If there’s something that makes your rental stand out from the rest, such as its location, amenities, or size, make sure to emphasize it in your marketing.
In Conclusion: Real Estate Investing Tips in Philadelphia
Buying an investment property in Philadelphia is a great financial decision. Investing in real estate can help you earn a monthly passive income and grow your long-term wealth. However, before signing any purchase agreements, there are some things to keep in mind.
It’s important to consider whether you have the time to be a full-time landlord. If not, you should consider hiring a professional property manager.
If you have more questions about investing in Philadelphia, contact TrustArt Realty! With over 200 doors under our care, we know what it takes for an investment property in Philadelphia to thrive. Let us help you grow your portfolio!