What are good towns to purchase rental properties near Philadelphia, PA?

I do a lot of investor sales.  I have done a few deals with Chris & Stephanie Somers.  I bet that you will not find another realtor saying something like this.  If you don't want to use me as a realtor then you should use Chris who answered just before me.  They are some of the finest people in the business (I don't work for them).

Adding to Chris's fine answer.  If you are looking for lower priced homes consider Philadelphia, Norristown, and some of the homes in Delaware County.

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 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 differenly. 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 home is like cooking French Cuisine vs  "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 propery that wil make an exellent investment will require some or all of the following criteria:

1) The average market rents need to exceede 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 excede 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.

Don't forget Bucks County, which is north of the city.  With great highway access via Route 1 and I-95 to Philly and also to NJ & NY, and several train lines to Philadelphia, Lower Makefield, Northampton (Holland/Newtown), Langhorne and Bensalem are great choices.

I hope this information helped,
Take Care,
Debbie

I agree with Joe. In Philadelphia itself you absolutely cannot go wrong with Center City or University City. Drexel University and the University of Pennsylvania continue to expand, meaning more and more demand for student rentals. The level of ownership is extremely low, with most people renting. There are a lot of slum lords in the area, so if you were to purchase a nice, well maintained property, you would never want for renters. If you were to purchase a place in say the Penn Alexander school catchment zone, you could also find renters wanting a good school and your homes desirability would be even higher.If you not as interested in student rentals because of the high turnover rate, a place like Center City offers better options for long term renters. It is an extremely desirable area, with stable property values. You pay more for your properties in the Center City area though, so you may not make as much profit, but it is a very safe bet. However, you do have a lot of price range options on the area from Rittenhouse Square to places like Filter Square (and even down into South Philadelphia).I also agree with Manayunk/Roxborough if you're looking within the city. It has great shopping and dining and is just a really hot area on the rise with a lot of cool factor.As far as outside the city goes, Joe's recommendation of Conshohocken is a good one. It is an extremely solid area, with good schools and great location (as he said, you are located close to major roadways as well). You also get renters from places like Villanova University in that area.If you want a really safe bet outside of Philly, you could also look into the Main Line. It may sound odd for an investment property but it's true. You may not make as much in rent and your property taxes will be higher, but you know your property value is going to hold steady. Despite its reputation, the Main Line isn't all mansions and expensive houses, there is affordable housing too. People want to live there because of the safety, amenities and top notch schools. If you were to get a duplex in say, a place like Ardmore, it would be an extremely safe investment. And, with the Main Line's desirability, if you were to purchase a multi family, who is to say you couldn't convert it to a single family down the road and flip it. As they say the most important thing when purchasing is, location, location, location and for that nothing beats the Main Line.I would definitely recommend looking into a duplex or triplex as your investment rather than a single family though. It is a bit more work, but generally your return is much better. Also, anything up to 4 units qualifies as a residential loan, whereas anything more than 4 units calls for a commercial loan, which is much more of a hassle.Take care,

Frankly, if you are looking for your best returns, nothing beats the neighborhoods surrounding Center City and University City.  Real estate taxes are relatively low (compared to suburbs) and demand means higher rents.

I'd also recommend the Conshohocken / Manayunk areas because they offer good transit.

 

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