Having breakfast over at Triple Joy for any reason is a good reason. You tend to walk away feeling just as the name suggests you might. But, when I get the chance to talk about investing in Philadelphia real estate with someone like Jared over french toast and scrambled eggs, I know it’s going to be a really good day.
As a seasoned investor who’s had a lot of success buying investment property in Philadelphia—especially in communities like my old haunt of Strawberry Mansion—I relish the thought of bringing new investors into the fold. Philly’s come a long way to earn its comeback status as a cool city to live, and invest, in. And, whenever there’s an opportunity for me to push it further forward, I take it—whether that’s purchasing property to rehab and sell myself or advising someone else exactly where and how to do it.
Your Best Bets for Investing in Philadelphia Real Estate
There are several reasons why I like investing in Philadelphia real estate and not all of them center around my personal success as a local investor. This city has been through the public relations ringer in years past, often touted as a low-employment, high-crime northeastern town with bad winters and even worse traffic. So, though visiting the Liberty Bell on Market Street frequently makes it onto bucket lists, switching careers to build a real estate investment business usually doesn’t—until recently. The landscape of the city has changed dramatically and that has changed the trajectory for investors like me. The City of Brotherly Love is the Comeback Kid.
I’ll give you some examples of what I mean. Though job opportunities have been on the rise for a couple of years, our unemployment rate still hovered at 5.2% back in January. Since then, it’s dropped to 4.1%. While that’s still higher than the national average, it reflects a sharp growth in the education, health, finance, and technology sectors—staple industries in Philly’s economy. And, overall crime is down as well.
These factors have helped to bolster demand for living in the city and that, in turn, has pushed home prices up. In fact, median list prices are currently trending upward more than 7% year-over-year and houses rarely stay on the market for more than 60 days. When market analysts predicted last year that Philadelphia’s housing market would likely be a strong one this year, they were right on the money.
Obviously, some parts of Philly typically perform better than others in terms of providing good returns on potentially great deals. And, your best bets are almost always going to be in transitioning neighborhoods still working on their own comeback. So, in looking ahead, let’s see where investing in Philadelphia real estate potentially provides the most bang for your buck—for this year and next.
It’s possible that the east Philadelphia neighborhood of Harrowgate may be nowhere on your investment radar, but it certainly should be. Right off the Market-Frankford El, this multicultural urban community is, quite literally, on the path of transitioning. Now that Fishtown is well-established as one of American’s hottest neighborhoods to move to, developers are taking their influence north towards, and through, other hot spots to reach little-known pockets like Harrowgate.
And, already, their presence is being felt. Once abandoned mills, factories, and warehouses are slowly being turned into loft apartments much like what’s been happening at a faster clip in nearby Kensington. New restaurants, bars, and coffee houses are also popping up thanks, in part, to funding provided by developers who want to make a social impact by investing in real estate in otherwise struggling areas such as Harrowgate.
Although the impact these changes are having on the local housing market isn’t as dramatic as other areas around town, there is little doubt that it will shift sooner rather than later. So, a good time to get in and nab a few deals is now before the word really gets out. With about an equal number of renters and homeowners in Harrowgate, there is a good chance you’ll do well investing in single-family homes to hold as rentals or to renovate and sell—or, both.
One of my personal favorite up-and-comers, Strawberry Mansion’s slow, but steady, ascent into a safer, cleaner, economically-stable community is long overdue. The victim of stalled revitalization efforts over the years, the 20-year old plan designed by the Neighborhood Transformation Initiative (NTI) to tear down decrepit, even dangerous, buildings and replace them with homes and businesses got a second chance last year. But, until the William Penn Foundation committed $1.5 million dollars in June, little had been done to move some of these efforts along—by government organizations, anyway.
The fate of much of this historic district’s resurgence, it seems, continues to lie in the hands of real estate investors who have both the experience and the know-how to turn older, run-down, ugly houses into affordable homes for both existing residents and new ones coming in. And, for many first-time home buyers who prefer buying in areas on the cusp of transitioning, Strawberry Mansion is certainly the place to move to.
This uptick in interest has helped listing prices trend upward 13% year-over-year. As demand for the area continues to surge and home sales prices follow suit, you’ll want to make sure you’ve done your part to help the community’s revival—and your bottom line—by buying and renovating these unique neighborhood homes now.
East Mt. Airy
Bounded by one of the nation’s hottest affordable Philly neighborhoods, East Mt. Airy is well on its way to giving its happening neighbor, Germantown, a real run for the money. Known in the past primarily as a business and shopping district, visitors who were once charmed by the strong presence of mom-and-pop stores and cafes are now looking to settle in and buy a piece of their own American Dream. Since less money currently buys more space in this family-friendly northwestern nook, they can dream a little bigger here, too.
With two stops in town for boarding the Chestnut Hill East Line, East Mt. Airy is also drawing in upstart Millennials who need easy access to their Center City offices. And, because Millennials remain the largest segment of homebuyers in the nation, buying, renovating, and selling property where they want to live is always a smart way to invest—especially when the entry point is low compared to more established hipster havens like Northern Liberties. And, if you buy low enough, you have a great chance of seeing good returns since median homes sales prices for East Mt. Airy are on the rise.
Of course, as long as you have a way to drum up qualified leads on distressed homeowners, you should be able to buy, rehab, and sell properties in just about any Philly neighborhood. And, with local foreclosure rates still some of the highest in the nation, the number of homeowners experiencing a degree of financial duress is significant. In fact, about one in 373 homes were in foreclosure in the first quarter of 2019 alone, according to Attom Data Solutions—likely due, at least in part, to the higher tax bills most Philadelphia homeowners received this year. Since the city recently increased property taxes again for about three-quarters of all single-family homes, it’s possible that the number of residents who fall behind on their bills—or ability to care for their houses—will be going to go up, too.
If your real estate lead generation system can locate these homeowners before they enter the foreclosure pipeline, you’ll find yourself with a motivated seller who needs to offload their house fast to someone who can close quickly. And, if you don’t have one, I’ve got one you can easily transition into using.
A Better Way to Find and Close on Philly’s Best Deals
We don’t need to have breakfast at Triple Joy for me to tell you that the best way to find and close on some of Philly’s better deals is to become an independently owned and operated HomeVestors® franchisee. As a franchisee, you have access to the full scope of marketing tools and resources, like the nationally-known and trusted “We Buy Ugly Houses®” ad campaign, that drive motivated sellers of off-market properties directly to local franchisees, like me.
HomeVestors® franchisees have been buying houses in 46 states since 1996, so homeowners who call know they’ll speak to someone they can trust to close on their home—and potentially keep a bad situation from getting worse—fast. When you’re investing in Philadelphia real estate for a living, like I do, obtaining that level of seller confidence in your investing business is invaluable. And, as a HomeVestors® franchisee, you get it almost as quickly as you’re served a great cup of coffee from my favorite Philadelphia cafe.
To find and close on the best deals that Philadelphia has to offer, get qualified leads to come to you. Contact HomeVestors to start investing in Philadelphia real estate today!
Each franchise office is independently owned and operated.