7 Tips For Choosing The Best Areas to Invest in Philadelphia

Buy a rental property in one of the best areas to invest in Philadelphia and you’ll see get monthly cashflow while growing your long-term wealth. The tenants pay rent which pays down the mortgage and builds up your equity on an asset that is appreciating over time. Sounds good, right?

So we have seven tips for choosing the best areas to invest in Philadelphia.

1. Invest in neighborhoods you know

Philadelphia is a city of neighborhoods, some where most houses have been renovated and others where no house flipping is happening at all. We have hispster neighborhoods like Fishtown, neighborhoods where everyone would like to live like University City, and the neighborhood that serves the best cheesesteak (South Philadelphia, of course!). You don’t have to limit your investing to the neighborhood where you live, but you should get to know a neighborhood very well before making an investment in it.

2. Focus on growing areas

Where are things happening in Philadelphia? Think about new businesses, new housing and places where local or state governments are investing. (All big clues to the best areas to invest in Philadelphia!)

3. Do the math

Test a neighborhood. Find out how much properties cost, calculate your mortgage, and then look up rental rates for that area to see if cashflow is good. Zillow and other sites will also give you an idea of what appreciation has been like over the last decade.

4. Go where the renters want to go

Look up vacancy rates. Where do people in this city want to rent? What neighborhoods have too many rental listings that don’t seem to move very quickly?

5. Look ahead

Following municipal and real estate news at Philly.com can keep you informed of what the city is doing, where they’re taking on infrastructure projects and where they’re encouraging investment. Approval of a new 110-unit apartment building will affect rental demand in that neighborhood, for example. Where is transit being improved? Look for articles where they identify the best areas to invest in Philadelphia.

6. Be aware of the difference between your next home and your next rental property

Real estate investors who look for rental properties as if they were looking for their next home tend to be looking at the wrong things. Instead of luxurious finishes (counter tops, flooring, fixtures), look for durability. This isn’t about moving up from your current home. Keep it simple. Inspect the basic house systems: electrical, plumbing, roof, windows and HVAC.

7. Find out what tenants want in that neighborhood

Trying to rent out a three-bedroom house in a neighborhood where most potential tenants are looking for studio apartments is going to be difficult and likely cut into your cashflow potential. Find out what property types appeal to the people who are renting in that neighborhood.


Philly real estate offers so many great opportunities for investments that will grow your wealth. It’s going to take some work and you’ll have to do some research, but by following these tips you can choose the best areas to invest in Philadelphia.

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