Faro Labs / Markets / Philadelphia, PA
Philadelphia real estate investment market
What a typical rental in Philadelphia, Pennsylvania costs, rents for, and returns: underwritten by Faro's own engine, not a scraped summary.
Returns assume 20% down at 6.75% over 30 years, 7% vacancy, and standard operating costs: Faro's default assumptions, the same ones every report starts from. Home value and rent trends as of 2026-05-31.
Difficult for both
At market rent, a typical Philadelphia rental runs $116 short each month, and home values moved 1.6% over the last year. Neither leg is carrying deals right now, which means the ones that work here are bought well below market rather than at it.
The price a deal actually works at
Faro models five price points for Philadelphia, from a weak buy to a strong one. The market-rate deal is $236,883; a good buy is $213,195 and a great one $189,506 roughly 20% below market value. Those are the bars a specific listing gets measured against when you run it.
How Philadelphia compares
Of the 210 markets Faro publishes, Philadelphia is the 171st most expensive to buy into: 40% below the median covered market, and the 14th strongest on rent-to-price. Within Pennsylvania it's the 2nd priciest of 2 markets we cover. On the last year of home-value change it ranks 53rd.
To break even at the default financing, a typical Philadelphia property would need about $1,932 a month in rent: $143 more than the $1,789 the market currently supports.
What each tier costs in Philadelphia
Faro models five price points per market. A listing gets measured against these bars, not against a national average.
| Tier | Purchase price | Market rent | vs. market rate |
|---|---|---|---|
| Weak buy | $260,571 | $1,700/mo | +10% |
| Fair buy | $248,727 | $1,753/mo | +5% |
| Market rate | $236,883 | $1,789/mo | — |
| Good buy | $213,195 | $1,878/mo | -10% |
| Great buy | $189,506 | $1,968/mo | -20% |
A typical Philadelphia deal, underwritten
The market-rate property above, run through the same engine every Faro report uses.
| Purchase price | $236,883 |
|---|---|
| Monthly rent | $1,789 |
| Cash required (20% down + 3% closing) | $54,483 |
| Net operating income | $13,362/yr |
| Monthly cash flow | -$116 |
| Cap rate | 5.6% |
| Cash-on-cash return | −2.5% |
| DSCR | 0.91 |
One of the cheapest ways in
At $236,883, a typical Philadelphia property costs 40.3% less than the median market Faro covers: 171th most expensive of 210. Cash required at 20% down plus closing is about $54,483, which is what makes markets like this the usual starting point for a first rental. The trade is management: a cheap property is not a cheap property to run, and the fixed costs, a roof, a furnace, a turnover, are the same dollars against a much smaller rent.
Negotiation matters more than usual here
The gap between a market-rate Philadelphia buy at $236,883 and a strong one at $189,506 is 20%: a wide band. In markets with a spread that size, what you pay relative to comps drives the return more than the market's own direction does. Two buyers in the same city, the same month, can end up with completely different deals.
Philadelphia investor questions
Is Philadelphia a good place to buy rental property?
A typical Philadelphia rental at $236,883 renting for $1,789 a month returns 5.6% on a cap-rate basis and runs short by $116 a month at 20% down. Individual deals vary far more than markets do, which is the whole reason to underwrite a specific address.
Can you cash-flow a rental in Philadelphia?
Not at the market's own price and rent. A typical property runs $116 short each month. It would need about $1,932 in rent to break even. Deals that work here are bought below market rather than at it, which is what the price ladder above is for.
How much do you need to buy a rental in Philadelphia?
About $54,483 at 20% down plus 3% closing on a typical $236,883 property: one of the lower entry points among the 210 markets covered here.
Are rents going up in Philadelphia?
Rents moved up 3.2% over the last year, measured across 41 ZIP codes. The typical market-rate rental sits at $1,789 a month.
Other Pennsylvania markets
Run the numbers yourself
A market average is not a deal.
Paste a real Philadelphia listing and Faro underwrites that specific property from its own comps, with a target price you can actually offer.
Estimates for analysis and educational use only: not financial, investment, tax, or legal advice. Verify every number independently before making a purchase decision.