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Real Estate Investing: Urban or Suburban Markets?

Investing in real estate in Philadelphia can be a very rewarding venture. Real estate offers tremendous benefits including regular cash flow, tax benefits, and a solid rock to stand on in times of inflation. You still have a problem though; deciding whether to invest in the urban or the suburban market. Whichever you choose will depend on your goals, desire, and budget. Consider these real estate investing points before you commit cash.

Renters’ Diversity

When you have a house in the urban areas, there is the enormous benefits of diversity in renters, especially in Philadelphia. You’ll find all kinds including professionals, students, lawyers, doctors, established families with children, engineers, people who earn a high income and a host of individuals coming from towns and looking to settle down in the city. In the suburbs, there is less diversity. This doesn’t mean there is nobody in the suburbs who will want to rent your house, but just that they are few. Most people who want to rent a house in the suburb are looking for a multifamily home, apartments, and single-family homes. Real estate investing in the suburb shouldn’t be done without a complete understanding of the kind of people that will be coming to rent.

Price of Property

One of the most important things to consider in real estate investing is the price of the property. It is more expensive to buy property in urban areas that in the rural or suburbs. You will be able to get a larger property in the suburb than in the cities, assuming you have a fixed budget. Of course, more space means the opportunity to create extra features in the building, like a garden, garage, playground, or even a shed, which can attract renters.

Wear and Tear

Most people renting homes in the city may be doing so for a few months before moving on. Whereas in the suburb, tenants are likely to stay for years and make the place their home. This can have effects on the wear and tear of the house as suburb renters tend to care more for the house they are living, compared to urban dwellers who move more often. Real estate investing in the city will cost you more in repairs compared to the suburbs.

Think it through before making a decision on urban or suburb real estate investing. Consider the price difference in the land, the wear and tear on the building, and the ease of getting renters that will keep the cash flowing. You should also consider talking to a professional in real estate matters before making a financial commitment.

Point Acquisitions specializes in the greater Philadelphia market, including the surrounding suburban markets.  Reach out to us in case you have any interest in hearing more about our strategies in these markets.

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