3 Things Every Philadelphia Real Estate Investor Needs to Know in 2020

It’s a new decade in Philadelphia and the development boom of the 2010’s isn’t showing many signs of slowing down. Floods of out of state and foreign investors continue to pour into the market alongside troves of budding new developers. There’s seems to be plenty of room for everyone, but there are new rules affecting every kind of real esate investor from landlords to developers. Here’s the 3 most important changes every real estate investor needs to know in Philadelphia.

Bed Bug Remediation

According to Plan Philly, in 2019, Philadelphia City Council passed a new law making landords repsonsible for bed bug remediation if an infestation is found within the first year of a lease. If a bed bugs are detected and reported within the first 90 days of a new occupancy, the property owner will be responsible for 100 percent of the extermination costs. After that, the tenant and landlord split the bill for both investigation and remediation.

Lead Paint Regulations

A new ordinance will begin to take effect on October 1, 2020 requiring that all rental properties built before 1978 be certified lead safe or lead free before a rental licence will be granted. The rollout will take place gradually over the course of 2 years by zip codes divided into 4 regions. Hot markets for investors like Brewerytown (19121) will be among the first areas for the regulation to take effect. Under the new law, the only properties built before 1978 exempt from the regulation will be college dorms.

To comply, an EPA certified lead dust sampling technician or a PA licensed lead risk-assessor must determine that property is free from flaking, chipping, or peeling lead based paint or that dust samples are free from lead. Costs for testing can vary, but for the average row home in Philly, budget about $500 every time the tenant turns over.

Permitting Requirements

New rules for permitting took effect in October 2019 requiring permits for any interior or exterior demolition and/or remodeling. Any layout changes will also require architectural drawings to be stamped by the city. That means investors must factor in the both costs for drawings and permits along with the additional holding costs while completing the process. Additionally, if your project requires escavating the basement for additional square footage, you’ll likely need an engineer present to oversee the digging process.