2024 Multi-Unit Property Management Update

By Sabina Palermo

As we approach the end of 2024, Philadelphia’s multi-family real estate market is brimming with opportunities. Whether you’re new to real estate investing or looking to expand your portfolio, multi-family properties remain a strong investment choice in Philly, particularly for those looking to capitalize on value-added opportunities.

“Renovations are key to unlocking value…” 

As someone who’s worked extensively in both residential and commercial real estate, I’ve seen firsthand how multi-family properties can create a steady stream of passive income. More importantly, I’ve watched how smart investors are adapting to this year’s trends and maximizing their returns, especially with Class B (well-maintained and located in desirable neighborhoods) and C  (require more intensive management and may be located in less desirable areas) properties. Here’s a look at what’s happening in the multi-unit market and what you should know before making your next move.

Philadelphia has proven to be a resilient market, with demand for rental units remaining high. This year, Class B and C buildings—those in need of upgrades—are in the spotlight. Investors are finding success by making strategic renovations to increase rental income and overall property value.

At this point in 2024,” Sabina notes, “it’s all about identifying properties with potential. Renovations are key to unlocking value, and it’s a smart way to boost your portfolio.”

But while 2024 offers great potential, looking ahead is just as important. What’s next for multi-family investments in 2025?

Courtney Apple, Bright MLS

2025 Philadelphia Market Forecast

Looking ahead to 2025, Philadelphia’s real estate market is expected to remain a prime choice for investors. Rental demand will stay strong, fueled by steady population growth, especially as people continue to move from pricier cities like New York and D.C. Interest rates are projected to stabilize, which should offer more favorable financing options for multi-family investors.

“..prepare for next year…secure financing or scout value-add properties” 

Neighborhoods like Fishtown and South Kensington are expected to continue their revitalization, offering great opportunities for value-added investors. It’s also important to stay updated on Philly’s evolving tax abatement programs, which will continue to provide key incentives for multi-family developments in 2025.

“The end of 2024 is the perfect time to prepare for next year,” Sabina advises. “Whether it’s securing financing or scouting value-add properties, those who act strategically now will be in the best position for 2025.”

PermitPhilly.com

Financing in 2024: What’s Changed?

One of the biggest shifts in 2024 is how investors approach financing. Gone are the days of low interest rates; today, investors need to be more creative with how they structure their deals. While commercial loans require a larger down payment—typically at least 25%—the financing options have also become more flexible.

For multi-family properties, especially those undergoing renovations, lenders are offering more tailored loan products. However, working with the right lender is critical. Not all financial institutions are eager to finance these deals, and some may decline based on the condition of the property or the complexity of the financials. Having an agent who knows how to navigate these waters—and has strong connections to the right lenders—makes a world of difference.


ferrariniremodeling.com

Key Takeaways for Multi-Unit Property Management for 2024 and Beyond

If you’re thinking about investing in multi-family properties this year, here are a few things to consider:

1. Down Payment Requirements: Commercial investment properties require a higher initial investment than residential properties, so be prepared for at least a 25% down payment.
2. Financing Strategies: Multi-unit properties often qualify for specialized financing, but these deals can be complex. It’s important to work with lenders who understand the nuances of commercial real estate.
3. Renovations Pay Off: Value-add properties—those that need upgrades—can offer significant returns. Look for buildings that are well-located but may require cosmetic or structural improvements to increase their profitability.
4. Know Your Rent Roll: Understanding the financials of the property, particularly the rent roll, is crucial. It’s not just about what you’re paying for the building but also how much income it generates and how easily that income can grow.
5. Stay Updated on Tax Abatements: Philly’s tax landscape is constantly evolving. Make sure you’re working with an agent who can help you navigate the current tax abatement program and find properties that offer these benefits.

sothebysrealty.com

Position Yourself for Success in 2025

As we transition into 2025, there’s no better time to evaluate your investment strategy. The Philadelphia market continues to offer solid opportunities, especially in multi-family properties. Whether you’re looking to add value through renovations or take advantage of the city’s evolving tax programs, making smart decisions now will set you up for long-term success. 

If you’re ready to explore your options in multi-family properties or want to learn more about what’s happening in Philadelphia’s commercial real estate market, I’m here to help. Reach out to me at Sabina@phillyliving.com or give me a call at 215-821-5527.