Thinking about buying first property for rental income
I’m thinking about buying a new construction, town home or condo near center city Philadelphia. I love the city and visit pretty frequently. What is more profitable, rental or airbnb? I’m thinking about airbnb because I would want to live in my own house when I travel. Is it a lot of work to manage an airbnb remotely? I’m in Seattle and I don’t care to settle here. edit: I answered my own question...airbnb would not be profitable in Philadelphia. Seems property costs downtown in Philadelphia are about on par with Seattle now. Might as well buy in Seattle.
If it’s a new property, are you getting a good cost vs rent ratio ?
I haven’t narrowed down on property but I think Airbnb is not the way to go for Philadelphia.
This is not a sound investment strategy for rental income because the math won’t work out. The condo will cost too much overall vs. rental income. I own multiple rental properties and any profit you make can get wiped by one tenant that does $10K damage to the apartment. Everyone wants new paint and new carpets to move in. It’s lots of work and if you farm it all out from Seattle you’ll not turn a profit on one unit alone. If you want a weekend apartment you can visit that has its costs partially offset by being rented via AirBNB, that could work. Lots of cities are becoming more and more against AirBNB and short term rentals in general. Do your research.
Some of what T202 is right but although I won't be that negative. Unless you personally know the Airbnb manager, I would strongly suggest rentals. Besides you need a permit in center City for Airbnb (I own a property in Rittenhouse so I know). In my case the SOB manager was renting the place for cash when he would say it was empty on Airbnb. Now it rents for about 2750 ... After my down payment, I barely break even. Your overall plan might work but I'd recommend expanding your area to include Spring Garden, etc. You will actually make a profit. The price premium in Rittenhouse Sq is to high.
Barely breaking even isn’t enough over time. One of my properties needed that $10k in repairs and that didn’t come out of my pocket that came out of the positive cash flow from my other properties. So does regular repairs. I haven’t been cash out of pocket since initial purchase and prep for their first rental. This is a rental business. My rental properties are not weekend getaway homes. AirBnB people would be disappointed. That’s a totally different business with different economics. More cleaning, because those customers want it hotel clean every time. That means more day to day hands on. Rental customer arriving Wednesday afternoon and checking out the following Tuesday morning? But you have a big work meeting all afternoon Wednesday? So you hire someone? More eating into your revenue.
Yes I looked...i think long term rental is the way to go. I see property costs in CC are as high as downtown Seattle and they are renting out on Airbnb for $100 a night with 20 days booked a month max. That’s like $2,000 a month barely enough to cover mortgage. These are like $500k-800k condos. CC is probably not the way to go. Charging $3,000 mo rent on a $400,000 property in fish town is probably a better option.
Never buy a townhome or condo
Why not
Hoa, slow appreciation, hoa, fast deprecation, and hoa
I moo i moo pm
You really need to do more research into this. As a landlord, I can tell you that it’s not a hands off affair unless you have a kickass property manager (rare as hens teeth) and they charge a huge cut from your rent. The only exception to this is a higher end new build property where every appliance is new and comes with a warranty and service backup.
Why I said new construction! I don’t want to deal with frequent repairs.
Is it a high end/ luxury construction?