Aside from the points mentioned in our previous segments, there are some other good reasons why Philly and the surrounding area make for such a good investment:
• The job market. Despite a fairly high unemployment rate (higher than the national average), Philly’s numbers are falling rapidly. This shows that the job market is improving, which bodes well for investors.
• Population. With the growth of the job market comes more people who are interested in taking advantage of it. New jobs mean a higher population, which in turn results in a higher demand for rentals and real estate.
• House prices. Compared to the national average, house prices in Philadelphia are quite low. This makes it an appealing prospect, as those values are likely to rise over the coming years.
• Homeownership rate. Unfortunately for many, even though prices are lower, so are average wages. This means that the number of homeowners in the city is decreasing. However, as a result, the rental market is growing. This makes real estate for cash flow purposes particularly appealing.
• Increased construction. Areas such as East Market, University City, and Navy yard are seeing record levels of real estate construction. This trend is seemingly set to continue, meaning there should still be some good availability over the coming years.
The Philadelphia market also has plenty of options for the smart investor. These include sought-after neighborhoods like Chestnut Hill, Fairmount, and Roxborough.
In terms of property types, you have a few options. We’ve covered them in more detail, below:
- Residential. Perhaps the most popular type of investment is in residential real estate. Houses and apartments are plentiful, and it’s certainly possible to get a good, quick return on your investment. If you can fix up a cheaper residential property and flip it, you could soon turn a profit. However, as mentioned above, there’s a lot more to it than you may think. This type of investment is good for property appreciation and re-sell tactics.
- Commercial. Businesses are always looking for commercial space in expanding cities. Although these types of properties can be lucrative, it’s a lot more complicated than residential investment. However, incomes and cash flow generally tend to be very good. Usually, more experienced investors turn to this kind of real estate. REITs will often look to this kind of real estate.
- Land. This type of investing requires a lot of research and time. Vacant land, lots with no construction, can be a very lucrative investment. There are often many possibilities with this type of real estate, but the legalities and intricacies mean it’s usually something experts take on.
For beginners, we’d always recommend trying residential real estate investment to start with. It’s the easiest form, and often the risks are lower. Additionally, it’s possible to make money faster.
Back to the Complete Beginner's Guide.