Fishtown vs Dickinson Narrows

[Pennsport]

Originally Posted by dubLeE

Anyone able to comment on rentability (don't think that is a real word) in both areas?

I own a couple of places in Pennsport (right around the Sinai site actually). Pennsport is primed to explode for a couple reasons:

1. Location: East = an ever-improving and expanding waterfront; North = the quaint and historic Queen Village which ends at the nationally-recogized South Street; West = arguable the hottest neighborhood in the city (Passyunk Square is a short walk away); South = not fantastic neighborhood, but will improve quickly and you also have close access to necessities like big box retailers and supermarkets
2. Space: diagonal super streets like Moyamensing and Passyunk Ave allow for a natural restaurant/retail row. Moyamensing from Snyder to Washington will become what Passyunk Ave is to that neighborhood within 3-5 years (if not sooner).
3. Neighborhood pride/housing stock: Pennsport neighborhood was never neglected or abused like most other Philly areas. It's extremely safe, neighborly and taken care of in all ways
4. Design: We have four to five amazing parks within .5 square miles. Dickinson Square park is arguably the most functional, safest and most frequented city park in Philly

There are many more reasons, but those are the top in my opinion. I would definitely go Pennsport over Fishtown, and this from a person who lived in NL/Fishtown for years.

Now, with this said, renting a 1/2 dollar townhome in any neighborhood outside of Center City, Fairmount and maybe NL will be extremely challenging for many years to come yet. If renters have that kind of money to spend monthly, they almost always buy... I've found the sweet rental price to be b/t $1,500 - 1850. This attracts much interest and ensures a decent renter since it's enough money to weed out the unemployed.

[sj08054]

Originally Posted by dubLeE

Anyone able to comment on rentability (don't think that is a real word) in both areas?

Forget renting. It does not make sense to put in $500K into a home to rent unless you were in CC. Once you go above $2K in rent (that's what you would need to charge in rent for property in question) to even make any sense financially.


I had a place around the corner that I rented out for $1000 (800sq/ft).


As to why someone would spend that much? I personally wouldn't, especially if I care about school. Putting $500K+ into a home and then having to pay for private school would not be my preference.

[1ondoner]

I also wouldn't target students because you get a high turnover of tenants. I prefer tenants who stay for a couple of years. Plus the higher the property price, the lower the ROI. Rent per square foot diminishes as the amount of rent you can charge increases.

The above applies to those who are financing. If you've got $500K sitting in the bank, then you can pretty much do whatever tickles you.

Originally Posted by sj08054

Forget renting. It does not make sense to put in $500K into a home to rent unless you were in CC. Once you go above $2K in rent (that's what you would need to charge in rent for property in question) to even make any sense financially.


I had a place around the corner that I rented out for $1000 (800sq/ft).


As to why someone would spend that much? I personally wouldn't, especially if I care about school. Putting $500K+ into a home and then having to pay for private school would not be my preference.

[sj08054]

Originally Posted by 1ondoner

I also wouldn't target students because you get a high turnover of tenants. I prefer tenants who stay for a couple of years. Plus the higher the property price, the lower the ROI. Rent per square foot diminishes as the amount of rent you can charge increases.

The above applies to those who are financing. If you've got $500K sitting in the bank, then you can pretty much do whatever tickles you.

It's not as simple as higher the property price, the lower the ROI. It's about the rental market. Putting $500K+ on a single family unit in a market that doesn't really support it is not a good financial decision. Spend the $500K+ on a triplex at a right location and one may good return.

[1ondoner]

Property is priced per square foot and rent is also charged per squarefoot. However, at a low price/sq foot, you can buy several properties for what you would pay at a high $/sqft. And the combined rent will be much higher.

Just pick 2 properties, one high end and the other starter home. And calculate the ROI. It's will be lower for higher priced home. I have a property where the rent is $3,500 per month and I have other properties I can compare to. If I sold the property I could buy several properties that would give me over $5,000.

And FYI, the reverse is true, slumlords have the highest ROI when it comes to real estate.

Originally Posted by sj08054

It's not as simple as higher the property price, the lower the ROI. It's about the rental market. Putting $500K+ on a single family unit in a market that doesn't really support it is not a good financial decision. Spend the $500K+ on a triplex at a right location and one may good return.

[dubLeE]

Wow! A lot of thoughts and comments here. Appreciate everyone's input!

We aren't just buying just to rent it out. It was just a thought that we had thrown around down the road. I agree that $500K is a lot for sure. Both of us work in the city so it makes the commute that much easier without needing to buy another vehicle, worrying about trains/passes, spending hours just to make to work, etc. The 10-year tax abatement helps out tremendously to bring the long-term costs down. In the nine months that we have been looking, everything in the city priced out in the $500k+ price point for what we need. The suburbs have insane taxes coupled with the additional long-term expenses, we did not want to move out of the city just yet.