Whether you’re buying your first property or a property tycoon, ensuring your investment is worthwhile is the make or break of your business venture.
Choosing the right location is an essential part of your inquiries before you hand over the cash. So, why should you choose Philadelphia?
Thousands of Americans are migrating towards ‘Philly,’ making it the up and coming town of 2021.
Combining the culture and luxury of a big city with its small-town country feel, Philadelphia is deemed a World Heritage Site by UNESCO and a national treasure.
It isn’t any wonder that more and more of us are buying properties here. As to why that is, let’s take a look at Philadelphia real estate investment in detail:
Why Should You Head to Philly?
As a real estate investor, you want to follow where the people go. The population of Philadelphia in 2021 is at a whopping 1,585,010, making it the 6th largest city in the United States.
With numbers soaring in 2020 as people migrated from New York during the pandemic, many settled in Philadelphia due to its strong economy in IT, services, and education.
Young professionals, in particular, are moving to Philadelphia in the hopes of jump-starting their careers.
5 Reasons to Buy Real Estate in Philadelphia
Philadelphia is the ideal location for both short term and long term residencies, it is a gold mine for any real estate investor. Here are five reasons to throw your money at Philly:
1. You Get Access to a Vibrant and Diverse Economy
With the city’s population on a steady climb, Philadelphia has long term economic and investment prospects. Other cities may be growing and a quicker rate, such as San Francisco and Boston.
However, Philadelphia’s increasing popularity means that real estate is still at a profitable and affordable price range. This means that you’re more likely to profit on residential properties due to your low start-up rate.
2. You Benefit From a Stable Job Market
What comes with a stable job market? Stable tenants, and with job growth rates matching national growth, Philadelphia is the ideal city to invest in.
When you consider the rapid pace unemployment is dropping at, more and more professionals are committing to long term jobs.
This means that they need long-term and affordable accommodation. With substantial real estate moguls willing to offer this, it’s a win-win situation.
3. Population Growth and Changing Demographics
The population of Philadelphia has boomed in recent years through the changing of job demographics. This is due to the job sector, moving further away from labor-intensive work to more knowledge-based roles.
This means that there has been an increase in Graduates with relevant degrees descending on the job market, resulting in a rise in younger inhabitants in the city.
These young graduates provide Philadelphia with a higher skilled taskforce and educational foundation through training and studying, resulting in an influx of wealth into the area.
4. There’s Plenty of Construction Growth and New Developments
Due to the increasing population and a lack of suitable housing, Philadelphia expects an astronomical increase in new construction projects and real estate developments.
It has been suggested that nearly 8 million square feet of real estate will be added to the already expansive city. In 2018, new housing permits were at a record high of 1,800.
However, studies have suggested that in 2021 numbers will have surpassed this as housing demand increases.
5. It’s A Millennial City
When you consider Philadelphia is home to extensive college campuses, a thriving job market, affordable housing, and a vibrant nightlife, it’s no wonder the city’s a honeypot for millennials.
And it doesn’t end there!
Philadelphia has been ranked high in hundreds of categories from #1 for Live Music, to #10 for Best Place to Live, and #2 in Medical Research and Education, making Philadelphia a true honeypot for Millenials to congregate!
Real Estate Strategies for Building Profit
Now, we’ve covered why property in Philidephia is worth investing in, here are a couple of ways to ensure a decent ROIS. There are two main strategies to follow when getting into residential real estate:
1. Buy and Hold
Buying to rent is one of the most profitable long-term investments you can make when going into real estate. With average city rentals at $1570/month, investors are guaranteed a return of up to 3.1% for long term rents.
For shorter-term rentals, such as AirBnB’s, you can earn up to $2,350 per calendar month with a cap rate of 9.2%. (based on a property valued at $342,000).
Many millennials travel to the city alone and therefore turn to flatshares to save some money. Depending on how large the rental is, you can capitalize on your investment by leasing per bedroom.
2. Fix and Flip
Alternatively, you can get a quick turnaround by buying, fixing, and selling a property to the highest bidder.
By purchasing a fixer-upper, you can increase your revenue threefold through cheap property pricing (depending on condition) and investing in cosmetic repairs and maintenance to pass the inspections.
Of course, you need to abide by construction regulations; however, these are easily achieved through careful planning and funding.
Once the property is ship-shape, it’s ready to go on the market. Once sold, you can move on to the next fix and flip adventure, knowing that you have a wad of cash to invest in it.
Are You Ready to Get Started with Philadelphia Real Estate Investment?
We hope that having read this blog post, you now have a better idea of why Philadelphia real estate investment is worth your while. For more information on the subject, please feel free to reach out and contact us today!