rittenhouse square condo investment help (Philadelphia: real estate, rentals, transfer)

[gagaliya]

hi i am looking at a few condo units around rittenhouse square philadelphia, the prices just seem too good to be true when compared to ny/nj. For those who have been here for a while, can you please offer some insight, thank you!

1) a condo studio is quoted as having an annual tax of only $1000 and the agent said there is no tax abatement. Is that for real? it seems very low, is there any state government website i can lookup the tax records by address.

2) how are the condo prices around rittenhouse square philadelphia (the good parts of the city). Did they drop from last year, or remains relatively the same for the past few years.

3) what do you think of the future real estate prices in philadelphia. For example, in ny/nj, which i am very familiar with, the prices are expected to come down at least another 10-20%. What about in philly?

[bryson662001]

RE tax in Philly is pretty low compared to most places and especially New jersey but that's in the city, doesn't apply to the suburbs.

All buildings in the neighborhood are not equal. The best value is in '60's, '70's and '80's built modern buildings where a one bedroom would go for high 200's to low 300's. Prewar buildings tend to be more expensive. Also buildings recently built or renovated tend to be much more expensive while not really offering the value to match. Prices in the 1st two groups have held up well because of limited turnover and lack of inventory. The newer buildings have had to come down in price and will probably drop some more. You can find comparables at mod cut - realtor link and www.realtor.com using zip 19103 and 19102

[gagaliya]

ok i found out the building has a 10 year tax abatement with 7 years left. I knew it was too good to be true on the taxes.

Does anyone know the average property taxes for the rittenhouse square area without abatement for a 1br or studio condo. thanks

[ooodsie]

Average prices are honestly VERY low, even without the tax abatement.. typically for a 1 bedroom condo in rittenhouse/center city area you would be looking at around $400-800 in taxes per year. This is not a mistake, the taxes are just VERY low.. Rittenhouse is a great area but be warned regarding parking if you have a car. Unless you get a condo that has an alloted parking spot, you will have a lot of trouble finding street parking so you will have to pay for a spot at a local garage to guarentee yourself a spot somewhere. Also a lot of the buildings are not pet friendly so if you have a pet double check that too. Some nice ones to check out are the dorchester in rittenhouse and there is also a newer one called the arts condominums which are right in that area at Locust as well.

[gagaliya]

Originally Posted by ooodsie

Average prices are honestly VERY low, even without the tax abatement.. typically for a 1 bedroom condo in rittenhouse/center city area you would be looking at around $400-800 in taxes per year. This is not a mistake, the taxes are just VERY low.. Rittenhouse is a great area but be warned regarding parking if you have a car. Unless you get a condo that has an alloted parking spot, you will have a lot of trouble finding street parking so you will have to pay for a spot at a local garage to guarentee yourself a spot somewhere. Also a lot of the buildings are not pet friendly so if you have a pet double check that too. Some nice ones to check out are the dorchester in rittenhouse and there is also a newer one called the arts condominums which are right in that area at Locust as well.

hi ooodsie, i dont understand this. If the regular tax is around <$1000, then why bother with a tax abatement for the same or even more In nyc for example, you pay significantly less in taxes if there is an abatement. Isnt that the whole point of abatement, to reduce tax. Thanks

[BPP1999]

Not sure if in your OP you imply that you are investing or are considering buying and moving to Center City, but be aware that though property taxes in Philadelphia are generally very low, there is an approximate 4% wage tax on earnings in addition to the PA income tax of 3.07%.

[gagaliya]

Originally Posted by BPP1999

Not sure if in your OP you imply that you are investing or are considering buying and moving to Center City, but be aware that though property taxes in Philadelphia are generally very low, there is an approximate 4% wage tax on earnings in addition to the PA income tax of 3.07%.

sorry what does wage tax mean? I live/work in nj, will be buying a condo in philly and just rent it out to college kids. Do i have to pay wage tax?

[Tone509]

Originally Posted by gagaliya

sorry what does wage tax mean? I live/work in nj, will be buying a condo in philly and just rent it out to college kids. Do i have to pay wage tax?

We didn't realize your intention to invest while continuing to live out of state. Since you're not a resident or employee within the city, you won't have to worry about the wage tax or (I would guess) PA's income tax.

[BPP1999]

Originally Posted by Tone509

We didn't realize your intention to invest while continuing to live out of state. Since you're not a resident or employee within the city, you won't have to worry about the wage tax or (I would guess) PA's income tax.

Correct, but there is something called a business privilige tax that you would be liable for as a landlord. There's a 0.17% or so tax on gross receipts (rentals, in your case), and a 6.5% tax on net profits.

[gagaliya]

thanks fellas. After adding up all the cost including the 4%(2 when buying, 2 when selling) transfer tax, this isnt as a good deal as hoped. But when compared to NJ, still very good. I can at least break even cashflow wise, if you try to tell an agent in nj you want to invest in a condo and expect breakeven, you get laughed out the door.