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Cap Rate Analysis: Philadelphia, PA

Investment metrics, interactive calculators, and data-driven analysis for Philadelphia rental properties.

Moderate — source deals carefully
Based on $265,000 median price and $1,480/mo median rent
Est. Cap Rate
4.15%
1% Rule
0.56%
Fails
GRM
14.9x
Price / Income
5.0x

Market Data

Median Home Price$265,000
Median Monthly Rent$1,480
Property Tax Rate1.36%
Population1,576,251
Population Growth0.2% / yr
Median Household Income$52,800
Vacancy Rate5.8%
Annual Appreciation2.5%

Cap Rate Calculator — Philadelphia

Pre-filled with Philadelphia medians. Adjust to match a specific property.

Property Details
$
$
3–8% typical
%
Monthly Expenses
1.36% rate
$
$
8–10% of rent
$
8–12% of rent
$
Cap Rate
3.35%Low
Net Operating Income ÷ Purchase Price
NOI / Year
$8,882
net operating income
Gross Rent Multiplier
14.9x
Good (<15)
1% Rule
0.56%
✗ Fails
Monthly Cash Flow
$740
before debt service
Annual Breakdown
Gross Rental Income$17,760
Less Vacancy−$1,030
Effective Income$16,730
Less Operating Expenses−$7,848
Net Operating Income$8,882

Cash-on-Cash Return — Philadelphia

Factor in financing to see your actual return on invested capital in Philadelphia.

$
$66,250
%
%
years
$
taxes + ins + maint + mgmt
$
$
Cash-on-Cash Return
-7.08%Weak
Annual Cash Flow ÷ Total Cash Invested
Total Cash Invested
$74,200
$66,250 down + $7,950 closing
Monthly Mortgage
$1,296
on $199K loan
Monthly Cash Flow
$-438
after all expenses
Annual Cash Flow
$-5,252
before taxes
Cash Flow Breakdown
Monthly Rent$1,480
Less Expenses−$622
Less Mortgage−$1,296
Monthly Cash Flow$-438

Is Philadelphia a Good Place to Invest in Rental Property?

Philadelphia, PA has a population of 1,576,251 and has been growing at 0.2% annually — roughly in line with national trends, meaning demand is stable but not exceptional. The median home price of $265,000 paired with median rents of $1,480/mo produces an estimated cap rate of 4.15%.

Property taxes at 1.36% fall within the national average range and shouldn't present unusual challenges. The vacancy rate of 5.8% is moderate and within normal parameters for a healthy rental market.

At a price-to-income ratio of 5.0x, homes cost about 5.0 times the local median income of $52,800. This moderate ratio indicates a balanced rent-vs-buy market. Home values have appreciated at roughly 2.5% annually. Steady appreciation means total returns will be primarily cash flow-driven — the more sustainable model for long-term wealth building.

Bottom line: Philadelphia presents moderate opportunities. Cap rates near 4.15% mean deals need careful sourcing — look for value-add rehabs or emerging neighborhoods where rents are climbing.

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