Yuriy: 0:00

Hi, welcome back to the Philly Landlord Guy. I'm your host, Yuriy Skripnichenko. The guy was Impossible. Last name. Just think of me as the Philly landlord guy. I am a certified property manager here in Philly and a licensed real estate broker. Rental market is shifting fast and today I'm breaking down what every homeowner and landlord needs to know

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We are here to share insights and experiences, not legal or accounting advice. Be sure to talk to your attorney, accountant, or professional advisor before making any decisions. Everyone's situation is different. Get the help that is right for you.

Yuriy: 0:43

if you have a for sale sign sitting in your yard and the phone isn't ringing or if you recently, pulled your home of the market because you didn't get the price that you want or didn't get much interest, this appears is, specifically for you. We are currently in weird the market according to Zillow. I have a report right here in front of me. Philadelphia is actually one of the hottest markets for 2026. And it's ranked number six in the nation. After cities like Hartford, Buffalo, New York, Providence, San Jose, and then Philadelphia, Boston, Los Angeles, Richmond, and Milwaukee but hot doesn't mean easy home values here are rising slowly, and forecasted for this year could rise just above 2%. Meanwhile, the inventory is starting to climb as that pandemic rate lock finally starts to crack. So this is a little bit weird, the market that we're seeing right now again. Labeled as hot was the growth only 2%. And we're expecting that the inventory will rise 16% this year. Do not know what it's gonna look like. Sellers are un listing properties though at record high rates. Rather than cutting the prices, they are stuck. And today I'm going to show you the math of why renting your home might be the only way to save your equity instead of selling it at a lower price, especially if you have that pre pandemic or pandemic level. Low mortgage interest. Let's get into the numbers that people usually hate to talk about the cost to leave Philly. So if you sell a house in Philly, let's say for$300,000, you are not getting a$300,000 check. Well, first, most of you, most likely have some kind of mortgage that you will need to pay off. Then you will have your real estate agent that you need to pay commission to. And in Pennsylvania across the state, it averaged about 5.8% say 6%. So on$300,000 house, it is a little over$17,000 just in. Real estate agent commission that may be split between the buyer and the seller, but all of that is negotiable, we used to have this commission split between one side and the other, but buyers are trying to push now as much as they can for the seller to bear the whole cost of the commission. For selling a house. Then there is a silent killer that people usually don't talk about is the Philadelphia real estate transfer tax. As of July last year the rate hit 4.578%. Again, usually was split that 50 50 between the buyer and the seller. So you're looking at another almost$7,000 out of your pocket and then add title fees prorated taxes, any insurance, any mortgage payouts any fees that mortgage charging you. So you are losing about 25 to$30,000 just to walk away from the sale table. So if the market is flat and you sell, now you are essentially. burning those five years of appreciation that you had to the property this is why I tell people, if you cannot get your number, if the numbers do not make sense to you, do not sell become a landlord and let someone else to. Pay off your mortgage while the market is catches up, or while you are building up your equity to sell at the price that you're looking for or to get that number that you're looking to get after the sale of the property. So I'm looking at bright MLS report for January, 2026 right now, not just January, from January 25 to January, 2026 right now. And across the whole city of Philadelphia. In January, we had. A little bit over 1500 units listed, and the median sold price was$270,000, which is a little higher than what we saw last year in January, we had the sale price of,$245,000, which tells us that the prices are going up. But at the same time, it is interesting shift that if you look at January, 2025, we had listed median price at two 60 and listed median sold price at 2 45. So we had this$15,000 discount on the sale. Versus this January we have a listed median price at. Two five and the sold median at two 70, which shows that we actually selling for more. But again, a lot of reports show that this is unprecedented time when sellers are delisting the properties, which did not even exist two years ago. Nobody was the listing. Now this is happening, and that's why the numbers may look that way. Also, another interesting fact is that based on the market, it's almost identical as it was last year in January to this year. Last year we had 65 days in the market to close. This year we had in January 66 base on the market to close. And interesting fact as well, that wait times for rentals are very similar. If I pull out the rental report I will see that, last January, we had 83 days on the market for, again, this is media number across the whole city of Philadelphia. So we had 83 days on the market from the listing heat in the market to the closing date. This January, it was 70 days on the market. So on average we had 62 days on the market for property to be rented. And we had on average 61 days on the market for an average overhead property to be sold. So it's almost identical number, just one day difference. So. Whether you sell it or rent, you are looking at about the same two months wait period. So the question is, do you want a onetime check that is$30,000 short of the amount that you actually sell in the house for, or do you want to have that monthly check that comes in every time and bills your wealth at the time when somebody is paying off your mortgage. And at the same time, these numbers are based on MLS report. That means that all of those listings were not, for sale by owners or not for Rent by owners, they were for sale by real estate agents. And the same for, for rent by agents or property managers, so by professionals, and that's how much time it took them to sell or rent your house. If you are doing it yourself as a for sale by owner or for lease by owner, it probably will take even longer time on the market. So before we get into another rent trends that we get from Zumper, I want to thank our sponsor, TrustArt Realty. If you are one of those homeowners, realizing that selling today is a trap, you're probably thinking about renting, but you're worried about this headaches that come with the renting in Philadelphia. And managing is complicated between$69 for your rental license and mandatory led certificates that you need to have plus, so eviction diversion program that you need to know about. So TrustArt Realty is offering. All of our listeners are free. Rental analysis. We'll look at your property and get your real world numbers on what it will net as your rental. Email us at TruSTAR realty@phillandlordguide.com or click the link and show notes or go to trustartrealty.com and click the link on the top to get in touch with us. Getting back to the numbers. So another report that I have here in front of me is Zumper latest February, 2026 report shows that Philly rent actually about 16% lower than the national average was a median of 1600, but. That doesn't mean much, it just means that our city is a little bit more affordable than the rest or the media in the country. And those prices are very significantly depends on where you are in the city, which area, which neighborhood or zip code. If you are in University City, you might see rents climbing up. But if you are a neighborhood like Callowhill, they are softened a bit. Looking at the rental report from Bright, I can see that last January we had a listed, medium listed trend at 1795 and the closed rent meaning The amount that the list was signed for was 1600, so it's almost$200 difference between listed price and least price. This January the numbers look a little bit better. The listing price is lower than last year listing price, it's 1750, which is$45 lower than the last year. But closed price is 1650, which is$50 more than the last year. So even though reports show that on average across the country we see rent decline, especially for one bedroom and two bedroom apartments a little bit, or we just seen where very slight growth on. On the median for, Philly in whole, we see that the rent still went up a little bit. Again, it's not a significant amount, but at least we're not in the negative. So if you decide to pivot to a rental you need to be prepared for. Selectivity shift in our tenants in 2026. Tenants are picky. They want appliances. They want washer and dryers, they want clean kitchens. And if your house didn't sell because it looked like 1985 inside well. Probably it's going to struggle on the rental market as well. So if you want to sell it at the top dollar, you need to make sure that your house looks clean and nice and have updated kitchens, bathroom appliances. And the same for the rental market. Tenants want to have the same amenities that the owner's looking for. And a lot of tenants, want to be owners, but they cannot afford. They looking to rent something nice, something that they would've bought otherwise. You have to put in the work to get the either top dollar for the sale or top tier tenant. Another piece of advice for the accidental landlord, an accidental landlord, is somebody who was not specifically planning on investment in real estate and you just end up having this property that you decide to rent out. So the advice is that do not rent for one year. If you're renting for one year, you are not gonna recoup anything. You will just lose the funds. We Have a lot of these calls when people calling us and telling that, Hey, I don't have any interest in my listing for sale right now. I wanna take it off the market and put it up for rent for a few months, but when the season picks up, sometime in spring when the weather gets better, I want to put it back for sale. So this is the worst idea that you can do. You will just lose money by doing this. Why first, if you're selling your property, and now probably it's already ready for. Sale, it's clean, everything was done or you, you fixed it up to the point that you were able to, to get your top dollar and it's ready for a new owner. But now, if you decide to rent it instead for just a few months, that means that the property will see it on the market for a couple of months until you get a tenant. Then you get a tenant and it's going to be even more complicated to find one, because you will not lease it for a year. You will just do it months to months or whatever time frame you're putting in front of yourself. And also look up, where we're talking about month to month lease protection. In Philadelphia, if you sign months to month lease, tenants have special protections. So you cannot just end the lease for any reason. You have to have specific reasons to end that lease. You find this tenant, you place them in your property, and now the property that was ready for sale is occupied by a tenant. You waited a few months and now it's the season for you to sell. You ask tenants to move out. They move out. You have all of the damages. That tenants leave behind, even if it's a perfect tenant that you can find just from people moving in and moving out, putting furniture in and out of your house, you will still have this little scratches or little indent on your walls and little things that you will need to fix, plus the cost of finding that tenant. And having them only for a few months, it'll catch up and you will just lose money. It's not gonna make you any money. Plus, when you're switching from being a homeowner to a landlord, you will need to change your insurance policy. It's just a lot of headaches for you and it's not worth it, short term. Investing in real estate, it's a long-term game, and it takes time to get the money from renting your house. It takes time to start making money where it takes time to understand what it actually means to be a landlord and how to make money in real estate. Even if you do it for one year, still not the best option. But if you are going to pivot and you actually want to rent out the house, you need to commit to at least three to five year cycle. Why? Because that's how long it takes to recoup that$30,000 that we were just talking about, that you would have lost if you sold your property. So let the tenant pay down your principle. And let the market appreciate, even if it's just those 2% per year that we're talking about by year 20, 28 or nine, you will be in a much stronger position to sell and walk away with real profit, not just with what's left over after the city agents take their cut. Also in those three to five years, you may realize how much leverage you have as a real estate. Investor with your taxes with everything that you receive for the property and how that all plays out, you may even want to keep it and not sell it at all. So a lot of things that people do not understand when they haven't rented properties before is that. Even if you break even or get an only 50 dollars a month as a cashflow, this is not all of your income.$50 a month is suggested cashflow that you can put aside in case of emergencies or in case if something happens or when it happens to your property, and to have reserves to fix those problems or be able to deal with the problems. What people do not take in consideration is that principle that tenants paying for you. So let's say your mortgage is$1,800 and your rent is$2,200. So after all of the commissions, property management fees maybe you will get a hundred dollars monthly cash flow. But in that$1,800 that you will be paying to your mortgage company, you have your principal payment of.$500, maybe$1,500, depends on how old your mortgage is, and all of that is your income as well when you go to sell it. Just getting into your equity when you do it to sell, you will get it all back. And this is how you are able to recoup that$30,000 within three to five years, not just from the cashflow, monthly cashflow that you're gonna put in your pocket. And most likely for. Most of you, even if you get that a hundred dollars cashflow from your property shows, it's$1,200 a year. It's not a lot. But also you will not pay any taxes on that because all of the depreciation and other expenses that you can take out as a landlord on your property. So, again, to summarize all of this, we're in a weird market. We do not know what it's gonna look like. We have still putting us as a top market in the us we're number six, but market in the US at the same time. We see. Only about 2% increase in home values. And we're seeing an increase in the number of listings that come in on the market. So with all of that, we may see prices decline. But all of that also depends on interest rates. If we'll see lower interest rates coming into the season, maybe we'll have more activities. Maybe we'll have buyers buying more. Or be able to afford more and buy more. But if not, and again, you're struggling to sell your property. Think about instead of just keeping an off market and do nothing to it, think about becoming a landlord. Think about rent on that property and having the tenant pay your expenses. If you found value in today's piece, place, like, and share and subscribe, leave us a review. It helps us keep bringing this deep dives into phily real estate market and property management advice. If you have a specific property you're struggling to sell or rent out, reach out to us at trustartrealty@phillylandlordguy.com. I'm Yuriy Skripnichenko, the Philly landlord guy. Keep managing right and I'll see you in the next episode.