Long-Term Investment: Why Philly Real Estate Remains a Top Choice
A couple of years ago, when the pandemic hit, everything stopped; and every industry saw its breaking point during the two years of economic crashes and uncertainties. Yet, real estate was one of the few industries that thrived despite all the setbacks. The New Normal made the market extremely competitive as houses sold quickly for high prices while investment firms and desperate buyers made quick purchasing decisions, often skipping inspections.
However, inflation repeatedly raised interest rates, leading to much higher mortgage rates—over 7%, the highest since the 2000s. People with low-rate mortgages don’t want to sell, so fewer houses are available on the market.
Although the real estate market is quite complex nowadays, investment properties for sale Philadelphia-wide seem unbothered by new trends. In fact, if you are asking yourself, is Philadelphia a good place to invest in real estate for long-term purposes, the answer is a resounding yes.
Let’s take a closer look at why investing in investment properties in Philadelphia is wise for the long term.
Philadelphia Real Estate Investment: Why a Strong Yes?
Real estate investment is about thinking strategically for the future and playing the long game while looking for opportunities that might not be that easily recognizable on the surface. If you are a beginner in real estate investment, you need to get thoroughly introduced to the real estate market locally and not be afraid to take risky steps and make some choices, but the most important thing is to make informed decisions based on reports, analysis, and facts.
If Philadelphia is your location of choice for real estate investments, you need to research the market and understand which neighborhoods are considered to be the most attractive for buyers.
According to the latest reports, neighborhoods like Chestnut Hill are most popular among executives, managers, and other high earners. The median rental price there is around $1,700 per month, while the median purchase price is $624,000.
Then, you have Logan Square if you want to be part of the more vibrant part of the city. The medium monthly difference starts at about $1,800.
Fishtown is particularly notable for artists, students, and hipsters thanks to its excellent restaurants, pubs, and coffee shops. The median purchase price is $348,000.
If families are your top target buyer, Port Richmond is a good choice, with a medium purchase price of $144,000.
Lastly, Philadelphia’s Grays Ferry is a good choice if you are on a limited budget, as the properties in this region cost around $140,000 per property.
A Broad Appeal to Various Groups of People
Another reason to invest in the Philadelphia real estate market is that Philadelphia is quite popular among various groups, including families, students, investors, young professionals, athletes, and retirees. The city has had a steady population growth of 5% for over a decade, and this population growth is driven mainly by millennials and immigrants, causing the real estate market value to increase.
The Value of Your Money
If we compare what you can buy in New York and what you can get for the same amount of money in Philadelphia, you would be surprised at how much value you would get in Philadelphia. For example, for two million dollars, you can buy a 3,000-square-foot ultra luxury residence with a 10-year real estate tax abatement and garage parking in the most popular neighborhoods in the center of the city.
However, in New York, for the same amount of money, you will get a much smaller apartment, likely around 1,000 to 1,500 square feet, without the luxury features, tax reduction, or guaranteed parking, which will probably be located somewhere outside the most sought-after neighborhoods.
Similarly, if you invest in Los Angeles real estate properties with the same amount of money, you would also be limited to a smaller property, often without the added amenities and in less desirable areas.
No Property Tax
A good reason to invest in Philadelphia real estate is that you are exempt from property tax under certain conditions. The City Council offered a ten-year tax abatement for commercial and residential real estate, which became effective in the 2000s and covered both new construction and renovated properties.
Thanks to this Philadelphia provincial government law, there is no property tax on construction for the first ten years. As a result, the home values increased, and the positive effect continued.
Fastest Growing Areas in Philadelphia to Consider Investing in
From the previously mentioned top neighborhoods worthy of investment in Philadelphia, Fish Down is currently one of the fastest-growing areas. Its popularity comes from the attachment of young professionals and artists to this neighborhood, which has increased home prices. Plus, ongoing development projects, such as the Schuylkill Yards Innovation District and the East Market development, make this region grow rapidly.
Consistent Demand for Housing
Thanks to Philadelphia’s consistently growing population, there is a consistent demand for housing. Young professionals, students, and families are attracted to this city’s educational institutions and cultural amenities, which make different types of properties very popular, including multi-family homes and student housing.
Location and Connectivity
We must not forget to mention Philadelphia’s strategic location alongside the East Coast and how easy it is to get to major metropolitan areas like New York City and Washington, DC. This hugely influences Philadelphia’s investment appeal, and if you add to this the excellent transportation infrastructure, which also has an international airport and extensive public transit, it is clear that Philadelphia is truly a gem among real estate investment locations.
Conclusion
Philadelphia is an excellent location for real estate investment. It offers an appealing blend of historical significance, vibrant neighborhoods, economic and demographic diversity, and a strong rental market. Its excellent offer ability and strategic location additionally increase the value of the properties. If you are thinking about investing in Philadelphia, don’t think twice; start investing in your future today.
