Philadelphia is a strong rental market and continues to be this year. As of April 2023, the median rent price in Philly was $1,855 which is a 7.3% increase from the previous year.
This is great news for investors who want to dive head-first into the market. To make sure you swim instead of drowning, it's important to follow these four real estate investing tips.
Keep reading to learn them.
1. Know the Market
Before investing in Philly real estate, it's important to study and understand the local market. You need to know the average price points for rentals and homes for sale, vacancy rates, average income rates, etc. to succeed with real estate investing.
Study the listings of available properties and note whether you would need to put work into them or if you could rent them out as-is.
Track sales data to compare your value estimates to actual sold prices. This data will help you create a strategy to find the best property for your budget and goals.
2. Partner With Real Estate Agents
Expert real estate agents will be familiar with the real estate trends in Philadelphia and can make a significant difference in the investment journey.
These professionals will have local knowledge and insights to help you make informed decisions.
Even so, it's always important to research the market yourself too. Having some understanding of real estate is better than completely relying on someone else.
3. Consider Long-Term Appreciation
Philadelphia rental properties have shown consistent growth over the years which can help investors build wealth over time.
There was a 13% decrease in the number of new listings in Philadelphia this year compared to last year. This means renters are staying in place and can continue bringing in rental income.
Keep a close eye on new developments and trends in the city to identify areas with long-term growth potential.
Even with a great deal, investment properties are more illiquid than residential homes. You need to be prepared for when inevitable difficulties come up.
Be sure to budget for expected and unforeseen circumstances that can arise as a rental property owner.
4. Plan to Hire Property Management
A rental property management company can help investors collect rent, pay expenses, manage tenants, and schedule maintenance and repairs.
Working with a property manager makes the life of an investor turned landlord much easier, but it does come at a cost. Plan to spend around 6% to 8% of your gross income on hiring excellent property managers.
Real Estate Investing Tips to Make You the Big Bucks
Real estate investing is not easy, but it can make you the big bucks if you go about it the right way. If you are interested in Philly real estate, be sure to follow this guide.
Know the market, partner with real estate agents, and consider long-term appreciation. Once you make the big investment, hire a property management team that can handle all landlord tasks for you.
HomeRiver Group is a full-service property management company that focuses on servicing both owners and tenants to provide the best experience. Contact us today to discuss in-depth how we help investors like you.