In Philadelphia, there are thousands of great rental properties to buy. Philly is a desired spot because outside of Center City, the prices are affordable and the taxes are extremely low. And those 2 ingredients make for a very profitable investment property as far as cash flow is concerned and in some neighborhoods you can toss in some appreciation to the mix and have an award winner !!!
In the out-skirts of Philadelphia, in the counties such as Montgomery and Bucks County, finding the winning recipe for a profitable investment is somewhat more challenging.
The county has higher taxes to boot and the average price of homes is considerably higher than in the city of Philadelphia. The properties are built differently. Public water and sewer is not always the standard in some county homes with wells and septic systems as well as land to care for. Thus, the maintenance of land and so on needs to be quantified as part of your recipe for success.
I guess investing in the county vs investing in a Philly row homeis like cooking French Cuisine versus "Shake and Bake" chicken with mashed potatoes and gravy. They both taste good but how sophisticated are your tastes and how much money to you have to spend ?
The property that will make an excellent investment will require some or all of the following criteria:
1) The average market rents need to exceeds your mortgage. Do not forget to calculate taxes and insurance. Use Craigslist to see what the rents are going for in the are where you are buying.
2) If possible choose a property with low maintenance or plan to budget lawn care and septic into your expenses. If your tenant is responsible for the upkeep, make sure the added costs do not exceed the market value for rent or you will never procure an occupant.
3) A Home Warranty is an excellent cure for maintenance issues that pop up and can be negotiated during the purchase. Ask the seller of the rental property you are buying to toss in a Home Warranty or buy one for yourself.
4) Location is a huge factor. If you want your investment property to appreciate, in addition to maintenance, buy in an area where property values are going to increase such as in commuter friendly neighborhoods, college towns, or in neighborhoods that are in the early stages of development. This is a buyer's market so now is the time to prospect about the future of neighborhoods and towns.
5) Multi-family Duplexes and Triplexes offer you 2 and 3 rental incomes all in one location. Mixed Use buildings can get tricky if you are not located in a commercially friendly location with easy parking and foot traffic. If there is an opportunity to procure one and the cash flows, then do it!
So, get out of the kitchen and cook up some Real Estate! It is a great time to buy.
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If interested in buying or selling investment properties in Philadelphia, contact Chris and Stephanie Somers at thesomersteam@yahoo.com or 215-400-2612 . You can connect with us on Facebook and Twitter . Also, check out our new Philadelphia investor site at Philly Investor Hub and ask us about Philadelphia Foreclosures and Short Sales .
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