Guide to House Hacking in Philadelphia, Pennsylvania

For many young or even middle-aged home buyers, the best option to getting a great home or getting into real estate investing is to start with house hacking. If the City of Brotherly Love is high on your radar then house hacking Philadelphia is a great way to get your foot into the real estate market of that city.

But is Philadelphia a good city for house hacking? Wonder no longer because in this post our data-driven article will give you the information, strategies, and financing options you need to know if Philadelphia is the right house hacking city for you and what strategies will work to get it done.

Let’s dive in!

Philadelphia: Tenant Friendly, or Landlord Friendly?

As those of you who read our Pittsburgh house hacking guide know, Pennsylvania leans on the tenant-friendly side in many ways, though individual laws on eviction process and lack of short-term rental regulation blunt that to some extent.

On the other hand, Philadelphia has multiple additional local ordinances that make the city much more tenant friendly than the rest of the state, so keep that in mind. Talking to the City of Philadelphia Fair Housing Commission and Philadelphia Basic Tenant Rights for a deeper look at these additional regulations to see if that makes Philly too tenant-friendly for you.

Philadelphia is the most tenant-friendly city in Pennsylvania. For many this will scare them off from house hacking. However, if you know the area well and aren’t scared off by a tenant-friendly city, then Philadelphia does have plenty to offer a smart house hacking investor.

Philadelphia Demographic Data Analysis

We use six main demographic-based data points to analyze the overall health of the area from a real estate perspective. These six points we use are: population growth, income growth, property value growth, crime level, crime change, and job growth.

When it comes to these six metrics, this is how Philadelphia compares to our benchmarks:

Data PointBenchmark (since 2000)Philadelphia
Population Growth20%4.4%
Income Growth30%80.3%
Property Value Growth40%200%
Crime Level< 500447
Crime Change0% or declining-2%
Job Growth> 1%3.38%

Overall, a Philadelphia house hack seems to have potential based on our six data points. It misses the mark on population growth, but hits every other mark including an impressive 200% growth in property values since 2000.

6 Strategies for House Hacking Philadelphia

While Philadelphia has plenty of opportunities in its growing real estate market, it’s not a place you want to go into without a strategy. Here are five strategies to help you get the most out of house hacking Philadelphia.

Focus on Neighborhoods

Neighborhoods can vary greatly when it comes to profit potential in Philadelphia. Check out city council meetings to see where new developments are going in. Also look for neighborhoods where young professionals are moving. These are often the best up-and-coming neighborhoods that are actually affordable to get into.

Rittenhouse Square and Chestnut Hill are undeniably beautiful, and impossibly expensive for the average home buyer to afford.

Make sure to keep tabs on properties near universities (of which Philadelphia has several) or tourist attractions because this opens up short-term rental demand.

Look for Multi-Unit Properties in Philadelphia

Depending on what type of property you’re looking at, many multi-unit properties are around the same price as an average detached house or even slightly cheaper. This makes for some pretty good deals on multi-family houses, duplexes, triplexes, and other multi-unit properties that are perfectly setup for house hacking from day one.

Average Real Estate Prices Philadelphia (Mean)

  • All housing $232,830
  • Detached houses $319,361
  • Townhouses $209,288
  • 2-Unit Structures $231,197
  • 3 & 4 Unit Structures $384,831
  • 5 or more Units $449,979
  • Average Monthly Rent: $1079

By the average numbers, duplexes are extremely affordable and many 3 & 4 unit properties are going to be very close to the cost of a standalone house even if they are just slightly more expensive.

This makes the multi-unit property market in Philadelphia especially interesting to house hackers looking for a good deal.

Consider Short-Term Rental Options

Philadelphia is a huge tourist destination, has a highly respected music scene, and is home to multiple professional sports teams. This is before even mentioning the many schools, which gets its own strategy heading further down the page.

Philly is a city that sees millions of visitors a year, and that opens up a huge opportunity for short-term rentals. The average room of a Philadelphia Airbnb is $130-150 a night, meaning even a handful of weekends a month can bring in the equivalent of a normal monthly rent or more.

If you aim for properties in nice neighborhoods that are in good locations, then the short-term house hacking options for Philadelphia can be amazing.

Pay Attention to SEPTA

Philadelphia has an exceptional public transportation system, referred to as SEPTA. Combining trains, trolleys, and busses, this is the 6th largest public transportation system in the country and can be a major selling point for finding housemates.

When you can point out you’re only a block away from the trolley to the downtown or two blocks away from a bus line to the nearest university, that creates demand for the rooms or units you’re house hacking, which may even allow for a higher rent because the location is worth the extra cost to many renters.

So don’t sleep on SEPTA – it should be a major consideration when looking at house hacking Philadelphia.

Offering Student Housing

Philadelphia has multiple large colleges & universities, creating a huge market for student housing whether you’re charging monthly by the room or catering to the students who just want a quiet place off-campus while plowing through their studies.

Philadelphia is home to:

  • Temple University
  • University of Pennsylvania
  • La Salle University
  • Drexel College

That’s a lot of students and young professionals in one location and massively opens up the market for student housing. Certain types of student housing can come with an inherently higher risk when it comes to damage and maintenance, but if you have the risk tolerance this can lead to incredibly profitable house hacks.

Explore All Funding Options

Conventional loans aren’t a bad way to go if you can afford them, but sometimes there are better options out there. Don’t rush into buying with a conventional loan without exploring options like:

  • FHA Loans
  • VA loans
  • Seller-backed financing
  • Using projected rental income on a multi-unit property for a larger conventional loan

These can open up opportunities that you otherwise wouldn’t have even known were possible.

Should You House Hack Airbnb in Philadelphia?

Despite Philadelphia passing rules regulating short-term rentals in the city, it still might be worth the time and cost to look at taking advantage of Airbnb and other online short-term rental services. The long and short of it is you’ll need to pay $150 license fee and apply for licenses for:

  • Limited Lodging Registration
  • Commercial Activity License
  • Approved Zoning for Commercial Activity

The Philadelphia office of licenses and inspection can help with any application questions.

However, Airbnb is in high demand in Philadelphia meaning it’s often worth it going through these hoops to get approved. Once approved, it’s a $150 a year renewal.

House Hack Near Multiple Tourist Attractions

Philadelphia is a city rich with history. The Liberty Bell, The Franklin Institute, Philadelphia Zoo, and Museum of Art are just a few of many, many attractions that get a lot of attention from locals and tourists alike.

Multiple professional and college sports teams add to that, as well as the trendier areas of Philadelphia in the downtown that trend to people looking for cultural events or a hip younger professional crowd. In other words, there are many tourist attractions throughout various parts of the city and getting close to one, or to a SEPTA stop that goes directly to one, can be a major boost for Airbnb bookings.

House Hack Near Universities

Universities have students, students have families who want to visit and the idea of going back to a house, apartment, or Bed & Breakfast setup is much more appealing than a hotel room for many. Having that option close to a school means you will get a high demand.

Considering there are four major schools to choose from, you have plenty of options for house hacking Philadelphia with college & university Airbnb in mind.

House Hack Nice Neighborhoods

The neighborhood matters, and the area matters. No matter how nice the property, if the outside streets are sketchy and scary, it’s not going to work from a short-term rental point of view.

These don’t have to be the best neighborhoods in town, but aiming for a minimal level of curb appeal will help make your Airbnb much more successful.

Philadelphia Neighborhoods: Good & Bad Neighborhoods for House Hacking Philly

Getting involved in the right neighborhoods is going to be a major determining factor in whether you are successful or not when it comes to a house hack.

Good Philadelphia Neighborhoods for House Hacking

There are plenty of opportunities throughout the city, but some neighborhoods stick out as being really good options for house hacking Philadelphia compared to others. Some of the best Philly neighborhoods to look for a Philly house hack include:

  • Fairmount
  • Manayunk/Roxborough
  • Point Breeze
  • German Town
  • Port Richmond
  • Fishtown
  • Brewerytown
  • The eastern section of Grays Ferry (the neighborhood can be a bit more sketchy too far west)

These are just some of the Philadelphia neighborhoods that offer outstanding house hacking opportunities.

Bad Philadelphia Neighborhoods for House Hacking

While some of these neighborhoods will still have potential, they tend to be a bit sketchy or rough-and-tumble for most people, and you’re definitely fighting uphill if you start in one of these neighborhoods. Beginning Philadelphia house hackers should avoid these neighborhoods in the beginning.

  • Tioga-Nicetown
  • Alleghany West
  • Hunting Park
  • Strawberry Mansion
  • Fairhill
  • North Central

More detailed breakdowns of why these neighborhoods are so dangerous can be found at Area Vibes or Money Inc.

Should You House Hack Philadelphia?

Philadelphia isn’t going to be for everyone, but there is some serious house hacking potential in this city if you aren’t scared off by the tenant-friendly aspects of Philadelphia.

Overall, Philadelphia is a great city that has a lot to offer. If you find yourself moving in the area, or live here and don’t want to leave, house hacking can be a fantastic way to get your first property and get into real estate investing.

The potential is here to find great properties that will appreciate in value and offer cash flow through short or long term rentals (or both). Now that you’ve read this article, you have all the strategies and tools you need in order to find a great deal house hacking Philadelphia.

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Analyzed by: Shane Dayton
Whether it was helping a friend build a cabin from scratch in central Alaska, scouting & analyzing Austin Texas neighborhoods, or exploring rural Iowa Airbnb potential, the variety of opportunities real estate offers have caught Shane's attention. After years of this, he brings his experience and passion for real estate to Everything House Hacking.

Learn more here.