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Best Strategy to House Hacking In Philadelphia

  • Post category:Buying
  • Post last modified:May 31, 2021

Philadelphia is a high-priced market and hard to cash flow especially when house hacking a property. It is still very doable to house hack in Philadelphia by buying below market multi-unit house and getting creative with the method of house hacking by using different passive income rental streams (Airbnb room rental, parking, and apartment rental) and betting a little on the appreciation of the property. 

How much money do I need to buy a House Hack in Philadelphia

To help with the property to cash flow it is recommended to do 20% down, but if budget is a challenge a downpayment of 3.5% is possible with an FHA loan. It is important to keep in mind that when doing a low down payment with an FHA loan you will have PMI (Private Mortgage Insurance) as an extra monthly payment. 

Depending on the location and how modern (upgraded) the Philly multifamily property is you can find one priced at $500,000 and with 3.5% down payment ($17,500) with an FHA loan your closing costs comes to about $35,000 – $45,000 including all closing costs (inspection fees and other closing fees).

Depending on your goals it is always recommended to take action and get into a deal if the investment is worth it in the long run. House Hacking is a long term strategy to buy and hold primarily unless you want to keep selling one house and 1031 exchange into another to save on taxes and keep growing to bigger and better house hacks.

Different Areas In Philly to House Hack

There are a large amount and a wide variety of different neighborhoods in the City of Brotherly Love (AKA Philadelphia), which some could have a high crime rate. Some ideal areas to house hack that most are huge fans of are Manayunk/Roxborough, Point Breeze, Germantown, Port Richmond, Passyunk Square/East Passyunk , and of course the university areas such as Temple University Area. 

What type of house hack should I do in Philly

The great thing about Philadelphia is that you can take advantage of multiple types of house hacks. Due to the location, you can do the traditional long term rental, however, it might make more sense to do an Airbnb model if the numbers yield a higher return. Also, if you are in the university area student housing can be a great alternative too especially for a young investor. As always do your due diligence and run the numbers with different pros/cons to figure out the best strategy for you.

More types of house hacks are found here that can be implemented in your market.

Long Term Lease Multifamily Strategy

In Philadelphia, most of the residential multi families will tend to be row houses. There is less maintenance with a whole unit long term leases when compared to room rentals and Airbnb house hacking models. When getting the right tenant they can be there for a long time, which results in no turn over the loss of rental income from vacancy. After all, most of the annual expenses happen with vacancy and property management.

Student Housing Room Rental Strategy

Student housing house hack in Philadelphia can be done in a single-family home or a multifamily home too therefore there is more feasibility to take advantage of it. Student housing can be risky since it is a younger demographic renting and there might be less cautious with the caretaking of the property and paying on time.

Airbnb Method

Just like the student housing idea of house hacking the Airbnb method can be done by the room in a single-family or a whole unit in a duplex, triplex or fourplex. Read more on Airbnb strategies on our article about profitable strategies.

What to Do If You Can’t Find the Perfect Cash Flowing House Hack

Getting a deal under contract is not an easy task in Philly. Inventory is low, houses are 50k overpriced, and there is a lot of competition from other investors from all different kinds all battling for the same property. Having the best agent representing you who knows your specific goals and the specific area inside and out can go a long way. 


Settle Down Philadelphia Brokers cover house hacking webinars and focus on the Philadelphia market. During their webinars, you will hear from three industry professionals about getting started in House Hacking. There will be a live chat to ask questions along with a Q&A Session.

Click here to read their tips and tricks to house hacking!

In Conclusion

Investing in real estate in Philadelphia is a great market to grow your portfolio in. The ROI is huge since people are choosing to rent instead of buy, the job market is increasing, the population is growing and there are a plethora of neighborhoods growing in wealth to take advantage of. Overall, do not miss out on the opportunity and take action for the long term growth of an appreciating city that is deeply rooted in American history. 

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