Philadelphia, PA, offers one of the most diverse and historically rich rental markets in the Northeast. With rising housing demand, an evolving job landscape, and an ongoing affordability crisis, the city presents landlords with both meaningful challenges and unique opportunities. Whether you’re exploring long-term rentals, short-term stays, or coliving rental models like PadSplit, success depends on choosing the right neighborhood and staying informed about city regulations and renter needs.
Why Philadelphia is a strong rental market
Philadelphia remains more affordable than other major East Coast cities like New York or Washington, D.C., yet rent prices continue to rise due to high demand and limited affordable housing supply. As of 2025, average rents range between $1,750–$1,891 per month, with homeownership increasingly out of reach for many residents.
Nearly half of Philadelphia’s residents rent their homes. Demand is driven by a mix of students, healthcare workers, service employees, and retirees. At the same time, limited new construction—particularly in workforce housing—has pushed more residents into the rental market, increasing competition for well-located, reasonably priced units.
While new inventory entering the market may slightly ease pressure in certain areas, metro-wide occupancy is still projected to remain strong at around 93.9% in 2025. For landlords focused on affordability, flexibility, and compliance, Philadelphia offers long-term potential in a shifting housing landscape.
Philadelphia’s job market and growth drivers
Philadelphia is often referred to as a “meds and eds” city, and for good reason. Its major institutions are economic anchors that create sustained rental demand and attract a diverse tenant base.
Key industries include:
- Healthcare and education: The University of Pennsylvania, Jefferson Health, Temple University, and Children’s Hospital of Philadelphia employ thousands of students, faculty, researchers, and healthcare professionals.
- Life sciences and biotech: University City and the Navy Yard are home to emerging innovation hubs, drawing early-career professionals and contract workers.
- Finance and government: Philadelphia’s role as a legal and administrative center drives housing demand from government employees and legal professionals.
- Logistics and warehousing: The city’s location along the I-95 corridor supports distribution and transport jobs.
- Tourism and events: Philadelphia’s rich history, convention venues, and performing arts scene support short-term housing demand in select neighborhoods.
‘Sustainability is also becoming a focus for the city and its housing partners. Energy-efficient upgrades, lead-safe renovations, and compliance with the “Healthy Homes” initiative are increasingly valued by both tenants and policymakers. Landlords who embrace these trends may gain both reputational and financial advantages over time.
Understanding zoning and rental regulations in Philadelphia
Before purchasing or renting out a property, landlords must understand and comply with Philadelphia’s rental rules.
- Short-term rentals (STRs): STRs are permitted only in licensed and properly zoned properties. Non-owner-occupied STRs require rental licenses and must be located in commercial or multi-family zones. Owner-occupied units need a limited lodging license.
- Long-term rentals: All landlords must register their properties, obtain a rental license, and comply with habitability standards—including lead-safe certification for homes built before 1978.
- Coliving rentals: Coliving rental models like PadSplit are legal but subject to city zoning, safety, and occupancy laws. Properties in RM-1 and RSA-5 zones—common in rowhome neighborhoods—are often ideal for multi-tenant arrangements with the right approvals and upgrades.
Regular enforcement of these policies makes it essential for landlords to stay up to date and prioritize compliance from day one.
Best neighborhoods for long-term rentals
West Philadelphia (Cedar Park, Cobbs Creek)
- Why invest? With close proximity to UPenn, Drexel, and multiple hospitals, West Philly offers steady demand from students, university staff, and healthcare workers.
- Rental market insight: Properties near SEPTA lines and walkable amenities consistently attract long-term renters.
- Best property types: Rowhomes, duplexes, and triplexes.
- Ideal tenants: Graduate students, educators, and small families seeking convenience and community.
Northeast Philadelphia (Mayfair, Tacony)
- Why invest? This residential area is known for affordability, stability, and consistent demand from long-term tenants.
- Rental market insight: Lower turnover and relatively stable property values make this a solid choice for landlords focused on cash flow.
- Best property types: Single-family brick twins, duplexes, and small multifamily homes.
- Ideal tenants: Families, seniors, and working-class renters seeking quiet, established communities.
Best neighborhoods for short-term rentals
Center City
- Why invest? The city’s business and cultural center, Center City attracts a mix of business travelers, hospital visitors, and tourists.
- Rental market insight: STRs can perform well in this area, but only in properties that meet zoning and licensing requirements.
- Best property types: Condos in STR-zoned buildings, apartments in mixed-use buildings, and renovated historical units.
- Ideal guests: Corporate travelers, medical visitors, and convention attendees.
Fishtown / Northern Liberties
- Why invest? These vibrant, walkable neighborhoods are home to music venues, galleries, and restaurants, making them top destinations for younger renters and visitors.
- Rental market insight: STR zoning is limited, so careful due diligence is needed before investing.
- Best property types: Modern townhomes, boutique apartments, and live/work lofts.
- Ideal guests: Remote workers, creatives, and out-of-town visitors seeking an authentic Philly experience.
Best neighborhoods for coliving rentals
Southwest Philadelphia
- Why invest? Close to University City and public transit, this area offers lower prices and high demand for workforce housing.
- Rental market insight: Coliving setups are increasingly viable here, especially in larger homes with shared kitchens and bathrooms.
- Best property types: Rowhomes with 4–6 bedrooms and shared amenities.
- Ideal tenants: Healthcare workers, students, and service industry employees seeking affordable, flexible leases.
Germantown
- Why invest? Germantown combines historic architecture with a growing creative scene and easy access to transit.
- Rental market insight: Properties with multiple bedrooms perform well in this area when marketed to shared households.
- Best property types: Large townhomes, duplexes, and historic homes.
- Ideal tenants: Students, entry-level professionals, and multigenerational renters seeking affordability and charm.
Emerging neighborhoods to watch
Brewerytown
- Why invest? Located just north of Fairmount, Brewerytown is experiencing a wave of revitalization, new businesses, and increased rental activity.
- Rental market insight: This neighborhood combines affordability with proximity to Center City, making it a smart pick for forward-looking investors.
- Best property types: Renovated rowhomes, duplexes, and new construction rentals.
- Ideal tenants: Young professionals, creatives, and renters priced out of neighboring neighborhoods like Fairmount or Fishtown.
Financing and tax considerations for Philadelphia landlords
- Rental license required: Every landlord must obtain a rental license and pass periodic inspections for safety and habitability.
- Property taxes: Rates are moderate compared to NYC and Boston, but higher than many Sun Belt cities.
- Maintenance and weather considerations: Philly’s older housing stock may require lead remediation, heating upgrades, and winter weatherproofing.
- Sustainability incentives: Landlords investing in energy-efficient upgrades may be eligible for rebates or tax incentives through city or utility programs.
Make the most of Philadelphia’s rental market
Philadelphia offers landlords a diverse set of strategies for generating rental income—from stable long-term leases in Northeast Philly to flexible coliving models in Southwest or Germantown. While affordability and regulation remain pressing challenges, they also create opportunities for well-informed landlords to deliver value, stability, and solutions for renters.
Those who embrace energy-conscious upgrades, stay ahead of zoning updates, and meet tenants where they are—whether through flexibility, affordability, or location—will be best positioned for long-term success.
Join PadSplit today to increase your rental revenue while supporting housing access in Philadelphia’s high-demand neighborhoods.
The information provided in this blog post is for general informational purposes only. It should not be construed as legal, financial, or professional advice. The content is intended to provide general guidance and should not be relied upon for making specific decisions.
PadSplit strongly recommends consulting with qualified legal counsel, licensed financial advisors, tax professionals, or other relevant experts for advice concerning your specific situation and investment needs. PadSplit makes no representations or warranties of any kind, express or implied, about the completeness, accuracy, reliability, or suitability of the information contained in this post.
