If you are a Philadelphia resident looking to invest in homes, you’re not alone. New research shows that investor home buying – especially for smaller investors – is on the rise.
A new CoreLogic study released in June of this year revealed that investor home buying reached a record high in 2018. In the US, investors bought 11.3% of homes. When comparing individual cities, Philadelphia was second highest in the country at 23.3%. Only Detroit had a higher rate at 27%.
Increase in small investors
In addition to the increase in investor home buying, the study also showed an increase in small investor home buying. It defined a small investor as buying 10 or fewer homes. These small investors did 60% of all investor buying. In 2013, they only purchased 48% of all investor-bought homes.
Some say an increase in buying real estate online has made it easier for small investors. Sites like Roofstock, RedfinNow and Zillow, among others, allow buyers to purchase homes with cash and then sell them online. Investors can then buy without visiting the property. However, less than 2% of 2018 investor home purchases went through these sites.
Why Philadelphia is attractive to investors
Many of the investors interested in Philadelphia are hoping to rent their properties. As the study showed, the cities with the highest investor activity tended to have a high expected return for rental income.
Philadelphia prices are also still relatively cheap for starter homes. Investors bought almost half of Philadelphia’s starter homes in 2018. These low prices drive many investors to Philadelphia and similar cities.
If you are a small investor in Philadelphia, the time may be right to start buying homes. The high return on rent and the low prices still available make the city a hot place to invest.