What is the cap rate in Philadelphia, PA?

The median cap rate in Philadelphia, PA is 6.2%. This is based on HUD Fair Market Rents and current home values.

Is Philadelphia a good place to buy rental property?

Philadelphia has a cap rate of 6.2% and estimated cash flow of -$36/month. This suggests solid returns for rental investors. Median home price is $253,517 with average 3BR rent of $1,910/month.

What is the average rent in Philadelphia, PA?

The HUD Fair Market Rent for a 3-bedroom in Philadelphia, PA is $1,910/month. This represents the estimated rent for standard-quality housing in the area.

Philadelphia, PA — Rental Investment Analysis

🟢GOOD— solid returns

Data: HUD FMR FY2024 + Zillow ZHVI April 2026 + Freddie Mac rates. Last updated June 2026.

Investment Summary

As of 2026, Philadelphia, PA offers a 6.2% cap rate with median home prices of $253,517 and 3-bedroom rents of $1,910/month.

Philadelphia offers solid returns for rental investors. Median home price sits at $253,517 — moderate by national standards, requiring a solid down payment but not out of reach. With 3-bedroom rents around $1,910/month, the 6.2% cap rate tells the story. At current prices and rates, expect to lose about $36/month — negative cash flow unless you put more down or find below-market deals.

The 1% rule comes in at 0.80% — doesn't quite pass, but close enough to find individual deals that work. DSCR of 0.97 is below 1.0, meaning rental income doesn't cover the mortgage. DSCR lenders will likely decline this market at current prices.

Bottom line: Philadelphia offers a balance of moderate cash flow and growth potential. Good for investors who want some income while building equity over time.

Data sources: HUD Fair Market Rents (FY2024), Zillow Home Value Index (April 2026), Freddie Mac Primary Mortgage Market Survey.

Cap Rate

6.2%

Above average

Monthly Cash Flow

-$36

After all expenses

Price-to-Rent

10.4

Investor-friendly

DSCR

0.97

Fails

Key Metrics

Median Home Price: $253,517
Average Rent (3BR): $1,910/mo
Price-to-Rent Ratio: 10.4(good)
1% Rule: 0.80%(fails — need 1%+)
Cash-on-Cash Return: -0.7%
Vacancy Rate: 8.0%

Market Strength

Unemployment Rate: 4.2%(-0.1% vs national)
Rent Growth (YoY): +2.9%(national avg)
Population Growth: -0.5% YoY

Assumptions Used

20% down, 6.52% rate, 30yr, 8% vacancy, 10% maintenance

Customize these numbers →

Property Tax Rate

1.43%

of assessed value (PA avg)

Median Income

$67,587

household (PA avg)

Rent-to-Income

33.9%

Moderate

Section 8 Max Rent

$1,910/mo

3BR voucher payment

PA Investor Climate

Landlord Friendly

6/10

State Income Tax

Has state tax

Property Tax

1.43% effective

Population Trend

-0.5% (3yr)

Population Movement (Tax Year 2021→2022)

Net Migration

-8,768 households

SHRINKING

Total Inflow

28,410

households moved in

Avg Income (New Residents)

$73,209

per household

Where they're coming from:

1.Montgomery, PA3,724 households · avg $94,268

2.Delaware, PA2,929 households · avg $51,726

3.Bucks, PA2,212 households · avg $64,278

4.Kings, NY1,289 households · avg $65,776

5.Camden, NJ1,096 households · avg $64,440

Where residents are leaving to:

1.Montgomery, PA6,297 households

2.Delaware, PA4,995 households

3.Bucks, PA3,769 households

4.Camden, NJ2,100 households

5.New Castle, DE1,400 households

Net outflow may indicate weakening demand — but can mean lower prices and higher cap rates.

Best Zip Codes in Philadelphia for Investors

19132

Cap Rate: 20.2%Cash Flow: +$838/mo$72,700

19133

Cap Rate: 14.9%Cash Flow: +$626/mo$88,359

19140

Cap Rate: 14.7%Cash Flow: +$681/mo$98,528

All Zip Codes in Philadelphia

Zip	Cap Rate	Cash Flow	Home Price	Rent (3BR)	DSCR
19132	20.2%	+$838	$72,700	$1,620/mo	3.17
19133	14.9%	+$626	$88,359	$1,490/mo	2.33
19140	14.7%	+$681	$98,528	$1,640/mo	2.30
19139	11.3%	+$520	$128,447	$1,690/mo	1.76
19134	11.2%	+$474	$119,463	$1,560/mo	1.75
19142	10.9%	+$504	$134,458	$1,720/mo	1.70
19131	10.3%	+$534	$164,161	$2,000/mo	1.61
19143	9.8%	+$412	$145,696	$1,700/mo	1.53
19141	8.3%	+$261	$160,868	$1,640/mo	1.30
19120	8.3%	+$269	$169,317	$1,720/mo	1.30
19107	8.1%	+$455	$313,353	$3,130/mo	1.27
19138	8.1%	+$252	$181,582	$1,800/mo	1.26
19144	8.0%	+$262	$192,265	$1,900/mo	1.26
19153	7.9%	+$280	$218,882	$2,140/mo	1.24
19124	7.7%	+$192	$171,133	$1,640/mo	1.21
19121	7.2%	+$132	$196,947	$1,780/mo	1.13
19149	7.2%	+$151	$225,878	$2,040/mo	1.13
19135	7.1%	+$122	$205,823	$1,840/mo	1.11
19102	6.7%	+$83	$372,152	$3,160/mo	1.04
19151	6.5%	+$20	$203,861	$1,700/mo	1.02
19137	6.4%	+$10	$229,760	$1,900/mo	1.01
19104	6.4%	-$4	$224,535	$1,840/mo	1.00
19150	6.3%	-$16	$239,630	$1,950/mo	0.99
19145	6.2%	-$36	$253,517	$2,040/mo	0.97
19127	6.1%	-$83	$349,366	$2,770/mo	0.96
19148	6.1%	-$69	$265,731	$2,100/mo	0.95
19106	6.1%	-$107	$400,339	$3,160/mo	0.95
19129	6.0%	-$94	$318,213	$2,500/mo	0.94
19126	5.7%	-$128	$229,548	$1,730/mo	0.89
19130	5.1%	-$485	$439,394	$3,020/mo	0.79
19136	5.0%	-$266	$239,025	$1,640/mo	0.79
19103	5.0%	-$532	$463,426	$3,160/mo	0.78
19154	5.0%	-$384	$322,216	$2,180/mo	0.78
19125	4.8%	-$487	$376,457	$2,500/mo	0.76
19146	4.8%	-$508	$391,780	$2,600/mo	0.76
18936	4.7%	-$507	$368,545	$2,410/mo	0.74
19128	4.7%	-$530	$365,770	$2,360/mo	0.73
19114	4.5%	-$501	$322,607	$2,040/mo	0.71
19111	4.4%	-$486	$296,044	$1,840/mo	0.69
19122	4.4%	-$502	$302,076	$1,870/mo	0.69
19123	4.3%	-$784	$461,841	$2,840/mo	0.68
19147	4.0%	-$980	$483,653	$2,780/mo	0.62
19152	3.8%	-$704	$324,673	$1,810/mo	0.59
19119	3.3%	-$948	$368,147	$1,870/mo	0.52
19115	3.1%	-$1,052	$388,571	$1,910/mo	0.49
19116	3.1%	-$1,084	$394,504	$1,920/mo	0.48
19118	1.3%	-$3,819	$896,370	$2,710/mo	0.20