As you enter the city of Philadelphia, you’ll see a sign that reads, “Enjoy our past…Experience our future!” This couldn’t be a more apt welcome for real estate investors.
As the oldest planned city in the U.S., Philadelphia has quite a past to enjoy. The city’s long history has given it several advantages – over 80 higher education institutions, a wealth of cultural offerings, and unique properties within 143 distinct neighborhoods.
But it’s Philadelphia’s future we want to share with you. Over the last few decades, Philadelphia has evolved from an industrial hub to a knowledge economy. That shift has driven some important trends – a stable, diverse job market, a growing population, and rising demand for housing. What’s most pertinent to investors is the influx of millennial workers. These are discerning buyers and renters who can afford a higher price tag.
Wondering which parts of the city provide the best return? Not surprisingly, the hottest opportunities for Philadelphia real estate investment are neighborhoods in transition. Here’s our list of the eight best Philly neighborhoods for investors right now. If you see one that looks right for you, let Insight Property Advisors help you start or expand your real estate business in Philadelphia.
One of the best real estate investments in Philadelphia is Brewerytown. Named for the abundance of local breweries that filled the area in the 19th century, this neighborhood has all the makings of a successful revitalization. First, it’s close to Center City. Residents can easily access public transportation to work downtown, visit the Art Museum, or enjoy Fairmount Park. Second, the new housing developments, retail stores, and trendy food establishments are already popping up. And third, according to Zillow, home prices in Brewerytown went up 12.4% in the last year, with a predicted 8.7% rise next year.
Fishtown is often thought of as the poster child of successful urban revitalization. Over the last decade, its transformation from an overlooked manufacturing district to a hotbed for art galleries, breweries, and music venues is remarkable. Out of all the Philadelphia real estate investment properties, the ones in Fishtown are probably the safest bet. Home values are still steadily rising. They went up 6.3% this year and Zillow expects they’ll rise 7.6% next year. This is also an excellent opportunity for landlords, as the area draws many students and younger renters seeking a unique living environment.
Strawberry Mansion’s transition to a safe, economically-stable community hasn’t been as dramatic as Fishtown, but there’s been slow and steady progress. Fortunately, the neighborhood’s revitalization efforts got a boost in 2019 when the William Penn Foundation committed $1.5 million dollars to the Neighborhood Transformation Initiative. This development has rekindled interest in this area. According to Zillow, housing prices have risen dramatically as a result – growing by 27.9% this year with a projection of 13.1% for next year.
East Mt. Airy
East Mt. Airy has three advantages that make it a desirable Philadelphia real estate investment. First, the neighborhood is already known for its charming business and shopping district. Second, its location between the more established West Mt. Airy and Germantown makes it an appealing option for new homeowners looking for a lower price point. Third, with an easy commute to Center City by regional rail, it’s become a popular neighborhood for millennials who work downtown. Mt. Airy’s reputation as a strong, welcoming community boosts its appeal even more for those with families. Housing prices have gone up 9.8% in the last year, and Zillow predicts 8.4% more in the year ahead.
Not surprisingly, the hottest opportunities for Philadelphia real estate investment are neighborhoods in transition.
Due to colloquial changes in the boundaries over many years, Kensington covers a lot of area – Upper, East, West, and Olde Kensington, for example. And with revitalization happening block-by-block, it’s smart to know you’re in the center of that movement to reduce risk. With one of the highest appreciation rates in the city according to Neighborhood Scout, Kensington has tremendous potential in the coming years and hopes to have a success story on par with neighboring Fishtown.
Port Richmond is located on the Philadelphia waterfront, which is undergoing a massive transformation into a mixed-use urban oasis as part of the Delaware River Waterfront Corporation’s master plan. There’s no doubt property values will skyrocket as the waterfront becomes a hot destination in the city. This neighborhood is already showing signs that it’s one of the best places to invest in real estate in Philadelphia. It’s bustling with new retail businesses and popular eateries. Plus, home values are steadily going up – 6.1% this year. Zillow expects they’ll rise again by 5.6% next year.
East Falls isn’t considered a transitional neighborhood like the others we’ve profiled so far. However, we’ve added it to the list due to the many opportunities for converting large homes into lucrative rentals. East Falls is known for its historic mansions and Georgian or Victorian-style buildings, all sitting on wide streets with mature trees. Many younger renters are drawn to the uniqueness of the housing options here and love having easy access to Fairmount Park. Home values continue to rise as well, with 4.8% growth this year and an expected 7.3% next year according to Zillow.
Logan Square is also a well-established neighborhood in the heart of Center City Philadelphia. Due to its prime location amongst Philly’s best museums, restaurants, and attractions, housing prices are significantly higher than the city’s median, making rentals very lucrative. According to RentCafe, the average rent is $2240 per month. Although you’ll need to invest more upfront for property in Logan Square, the pay-off over time can be significant.
So, is Philadelphia a good real estate investment? With the success story of Fishtown as a model and numerous revitalization projects underway across the city, the future looks bright.
However, not every neighborhood is right for every investor. Contact the experts at Insight Property Advisors to customize your investment strategy.