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Philadelphia, commonly referred to as “Philly”, is located in southeastern Pennsylvania and has the largest population in the state. Its population of over 1.5 million makes it the 5th most populous city in the United States. The greater Philadelphia region also boasts a high growth in its millennial population, leading the nation.

Almost half of the residents (49.4% according to NeighborhoodScout) are renters rather than homeowners. So not only is the large and growing population a good sign for real estate investors on its own, but buying a rental property in Philadelphia means plenty of demand from tenants.

It’s also important to note that this population consists of a highly educated workforce who supports the health of the local economy. The 1.4% job growth rate year over year is another positive sign of the strong and steady economy in the Philadelphia-Camden-Wilmington metropolitan area. While Philadelphia has historically relied on the manufacturing industry, it has become a more diverse economy in recent decades. Leading industries in Philly include finance, telecommunications, biomedicine, medicine and pharmaceutics, insurance, technology, and printing and publishing. Of course, with all of its famous historic attractions like the Liberty Bell Center, the National Constitution Center, and the Museum of the American Revolution, tourism plays a big role in the economy of the city as well.

The Philadelphia real estate market is in the top five housing markets in the Northeast region of the US for overall investment prospects, according to the annual report by the PWC. This is mainly due to the fact that Philadelphia real estate offers both affordability and the advantages of a highly populated city.

Philadelphia Realtors and Real Estate Agents

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Philadelphia  Real Estate Investment Performance
Facts and Market Trends in Philadelphia
Homes For Sale
2,834
Airbnb Properties
1,759
Rental Properties
13,954
Traditional Vacancy rate
7.80%
Airbnb Occupancy Rate
56.65%
Mashmeter
53.10%
Median Price
$298,767
Median Rent Price
$1,672
Price/sqft
$395
Median Days on Market
78
Price to Rent Ratio
17.1
Average Cap Rate
Airbnb
4.26%
Traditional
2.74%
Average Rental Income
Airbnb
$2,232
Traditional
$1,455
 
Median Household Income
$39,759
Population
1,580,863
Transportation in Philadelphia
79 / 100
Very Walkable
67 / 100
Good Transit
66 / 100
Bikeable
Philadelphia  Rent Prices
RENTAL STRATEGY STUDIOS 1 ROOM 2 ROOMS 3 ROOMS 4 ROOMS
Airbnb$1,486$1,585$1,646$2,208$2,865
Traditional$1,444$933$1,161$1,478$1,787
Philadelphia, PA - Homes for Sale - Newly Listed
$299,999
MLS PAPH807038
2407 E NORRIS STREET
Philadelphia, PA 19125
Fishtown
Townhouse
2 beds1 baths1,144 sq.ft.
CAP RATE
Trad. 2.10%Airbnb 2.81%
$244,999
MLS PAPH807692
4017 MITCHELL STREET
Philadelphia, PA 19128
Wissahickon
Townhouse
3 beds1 baths1,280 sq.ft.
CAP RATE
Trad. 2.01%Airbnb 4.06%
$270,000
MLS PAPH807662
2001 HAMILTON STREET #517
Philadelphia, PA 19130
Spring Garden
Condo/Coop
1 beds1 baths674 sq.ft.
CAP RATE
Trad. 1.71%Airbnb 2.48%
$550,000
MLS PAPH807368
1123 LEMON STREET
Philadelphia, PA 19123
West Poplar
Townhouse
4 beds3 baths3,100 sq.ft.
CAP RATE
Trad. 2.07%Airbnb 2.82%
Top Performing Philadelphia Properties
$321,500
MLS PAPH105436
615 LEAGUE STREET
Philadelphia, PA 19147
Bella Vista
Townhouse
3 beds2 baths832 sq.ft.
CAP RATE
Trad. 4.48%Airbnb 7.95%
$180,000
MLS PAPH505814
1539 N ORKNEY STREET
Philadelphia, PA 19122
Old Kensington
Townhouse
3 beds1 baths0 sq.ft.
CAP RATE
Trad. 6.42%Airbnb 7.91%
$159,900
MLS PAPH802864
2506 E BOSTON STREET
Philadelphia, PA 19125
Fishtown
Townhouse
2 beds1 baths808 sq.ft.
CAP RATE
Trad. 6.01%Airbnb 7.86%
$110,000
MLS 1000200222
5253 WALNUT STREET
Philadelphia, PA 19139
Walnut Hill
Townhouse
3 beds1 baths1,500 sq.ft.
CAP RATE
Trad. 5.14%Airbnb 7.86%
Recently Sold Homes in Philadelphia, PA
$249,000
MLS PAPH806222
9768 HILSPACH STREET
Philadelphia, PA 19115
Northeast Airport
Multi Family
0 beds0 baths1,968 sq.ft.
CAP RATE
Trad. N/AAirbnb N/A
$289,900
MLS PAPH785096
1219 S 46TH STREET
Philadelphia, PA 19143
Woodland Terrace
Multi Family
0 beds0 baths2,040 sq.ft.
CAP RATE
Trad. N/AAirbnb N/A
$150,000
MLS PAPH805334
4110 W GIRARD AVENUE
Philadelphia, PA 19104
East Parkside
Multi Family
0 beds0 baths2,721 sq.ft.
CAP RATE
Trad. N/AAirbnb N/A
$549,000
MLS 1009910092
1423 S 7TH STREET
Philadelphia, PA 19147
Dickinson Narrows
Multi Family
0 beds0 baths3,258 sq.ft.
CAP RATE
Trad. N/AAirbnb N/A
Property Value Changes and Real Estate Appreciation in the Philadelphia Housing Market

The Philadelphia housing market promises not only affordable real estate but significant property appreciation as well. Since Q1 of 2000, Philadelphia home values have experienced a total appreciation of 141% at an average annual rate of 4.7% (according to NeighborhoodScout). Zillow forecasts that Philadelphia real estate will continue to appreciate by 9.4% over the next year. This combination of cheap real estate and high natural appreciation makes Philadelphia investment properties a great option for investors.

Property investors should keep in mind, however, that the Philadelphia real estate market is currently a hot seller’s market. This is mainly due to the low inventory of homes for sale. As a result, property prices are rising in the market even though they are still affordable compared to most major metro areas in the US housing market.

Philadelphia, PA Top Multi Family Homes
$65,000
MLS PAPH801266
1533 DEAL STREET
Philadelphia, PA 19124
Juniata Park
Multi Family
0 beds0 baths1,256 sq.ft.
CAP RATE
Trad. 7.82%Airbnb N/A
$79,900
MLS 1009998360
536 E WESTMORELAND STREET
Philadelphia, PA 19134
Upper Kensington
Multi Family
0 beds0 baths1,503 sq.ft.
CAP RATE
Trad. 7.64%Airbnb N/A
$79,995
MLS PAPH794222
1707 BELFIELD AVENUE
Philadelphia, PA 19141
Logan
Multi Family
0 beds0 baths1,797 sq.ft.
CAP RATE
Trad. 7.52%Airbnb N/A
$85,900
MLS PAPH781770
30 E SILVER STREET
Philadelphia, PA 19134
McGuire
Multi Family
0 beds0 baths1,498 sq.ft.
CAP RATE
Trad. 7.34%Airbnb N/A
Homes Below Median Price in the Philadelphia, PA Real Estate Market
$321,500
MLS PAPH105436
615 LEAGUE STREET
Philadelphia, PA 19147
Bella Vista
Townhouse
3 beds2 baths832 sq.ft.
CAP RATE
Trad. 4.48%Airbnb 7.95%
$180,000
MLS PAPH505814
1539 N ORKNEY STREET
Philadelphia, PA 19122
Old Kensington
Townhouse
3 beds1 baths0 sq.ft.
CAP RATE
Trad. 6.42%Airbnb 7.91%
$159,900
MLS PAPH802864
2506 E BOSTON STREET
Philadelphia, PA 19125
Fishtown
Townhouse
2 beds1 baths808 sq.ft.
CAP RATE
Trad. 6.01%Airbnb 7.86%
$110,000
MLS 1000200222
5253 WALNUT STREET
Philadelphia, PA 19139
Walnut Hill
Townhouse
3 beds1 baths1,500 sq.ft.
CAP RATE
Trad. 5.14%Airbnb 7.86%
Philadelphia Airbnb Growth and Regulations

Because Philly offers unique historical attractions to tourists, it comes as no surprise that the vacation rental industry prospers in the city. In fact, Airbnb growth as been so great in the Greater Philadelphia region (a five-county area) that local hosts made over $6.2 million in additional income in 2018. Airbnb Philadelphia alone welcomed the most guests bringing with them $47.7 million in revenue for hosts in the city. This is all thanks to the legalization of Airbnb in Philly in 2015. The city hoped to capitalize on the upcoming visit of Pope Francis through short-term rentals. So zoning laws were changed and Airbnb rental properties have since been allowed to operate in residential areas. This makes it one of the best cities for Airbnb investment.

Even though the practice is legal, if you wish to rent out a non-owner occupied property, you will have to apply for a visitor’s accommodation variance. Beside that, to operate legally, Airbnb Philly hosts will have to pay an 8.5% hotel tax. There is also a cap on the days an Airbnb rental can be occupied by guests- up to 30 days at one time and up to 180 days in a year. The property cannot be occupied by more than 3 people who aren’t related at one time. There are also safety regulations hosts must abide by such as installing smoke alarms on every floor, in each bedroom, and in hallways near bedrooms of the Airbnb rental property. Carbon monoxide alarms must also be installed.

In addition to those Airbnb regulations, a Philadelphia host cannot make changes to the rental property for the purpose of renting it out on a vacation rental website nor can you advertise using lawn signs or the like.

Philadelphia, PA Top Airbnb Homes
$71 per night
Entire home/apt · 3 beds
Art Museum Area Stunning Studio
743
$113 per night
Entire home/apt · 1 bed
Modern Loft in Landmark Building
690
$96 per night
Entire home/apt · 2 beds
Rittenhouse Sq 1BR Apt w/Grdn Patio
656
$105 per night
Entire home/apt · 1 bed
The Philadelphia Experience - A
577
Philadelphia, PA Homes for Rent
$675
MLS PAPH807658
$1,000
MLS PAPH807680
607 MCKEAN STREET
PHILADELPHIA, PA
Greenwich
Townhouse
2 beds1 baths1,640 sq.ft.
$1,100
MLS PAPH807602
$1,900
MLS PAPH807728
5621 N 20TH STREET
PHILADELPHIA, PA
Ogontz
Townhouse
3 beds2 baths1,472 sq.ft.
Philadelphia, PA Open Houses
Open 12 PM to 2 PM
$618,000
MLS PAPH806848
2441 GRAYS FERRY AVENUE
Philadelphia, PA 19146
Graduate Hospital
Townhouse
3 beds2 baths1,590 sq.ft.
CAP RATE
Trad. 0.97%Airbnb 1.48%
Open 1 PM to 3 PM
$390,000
MLS PAPH807284
863 N PENNOCK STREET
Philadelphia, PA 19130
Fairmount
Townhouse
3 beds1 baths990 sq.ft.
CAP RATE
Trad. 2.12%Airbnb 2.39%
Open 1:30 PM to 3 PM
$679,000
MLS PAPH807188
2320 PEROT STREET
Philadelphia, PA 19130
Fairmount
Townhouse
3 beds2 baths1,700 sq.ft.
CAP RATE
Trad. 0.38%Airbnb 0.54%
Open 12 PM to 1 PM
$625,000
MLS PAPH807302
220 W RITTENHOUSE SQUARE #5E
Philadelphia, PA 19103
Rittenhouse
Condo/Coop
2 beds2 baths1,351 sq.ft.
CAP RATE
Trad. 0.42%Airbnb 0.59%
Best Philadelphia Neighborhoods for Buying Investment Property
70%
Mashmeter
property price
$586,950
Median
cap rate
5.47%
Traditional
6.47%
Airbnb
rental income
$2,675
Traditional
$3,165
Airbnb
homes for sale
52
occupancy rate
65%
Airbnb
58%
Mashmeter
property price
$325,000
Median
cap rate
7.96%
Traditional
11.78%
Airbnb
rental income
$2,155
Traditional
$3,189
Airbnb
homes for sale
33
occupancy rate
61%
Airbnb
77%
Mashmeter
property price
$549,000
Median
cap rate
4.20%
Traditional
6.69%
Airbnb
rental income
$1,923
Traditional
$3,059
Airbnb
homes for sale
21
occupancy rate
61%
Airbnb
81%
Mashmeter
property price
$474,900
Median
cap rate
4.86%
Traditional
7.71%
Airbnb
rental income
$1,923
Traditional
$3,052
Airbnb
homes for sale
35
occupancy rate
62%
Airbnb
65%
Mashmeter
property price
$550,000
Median
cap rate
4.53%
Traditional
5.70%
Airbnb
rental income
$2,075
Traditional
$2,614
Airbnb
homes for sale
3
occupancy rate
56%
Airbnb
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