The housing market has been characterized by low inventory and high demand, though too-rapid price increases in the Western part of the state have led to calls for new home construction. Housing value appreciation hasn’t been equal, however. Some cities have seen a growth of 43% in the last year, while homes in other cities lost 19% of their value.
You’ll want to be careful where you buy, and pick a good team to support you. Real estate investors already know the value of having a strong team around them, but be sure to include an experienced, local agent to work with you as you acquire properties in New Jersey to ensure maximum success.
Current Market Conditions in New Jersey
While the factors that make a town or city within a state a good investment can vary, it’s always important to consider the macroeconomic conditions that make a state good for real estate investors.
Median home values in New Jersey are $326,300, which represents a growth of 5.0% in 2018, with further growth of 3.8% possible in 2019. If your investment strategy focuses on price appreciation, New Jersey looks good in this area.
If you can afford it, a property near New York City will be able to capture NYC rents but will cost you less, and several areas such as Weehawken and Bayonne have been capturing the spillover from Hoboken and Jersey City.
Commercial real estate investors might want to look elsewhere, as New Jersey’s average price per square foot is almost $1,500 higher than the national average. Average assessed values for commercial real estate in New Jersey is $707,428, so you will need significant resources to break into the market.
The 5 Best Cities and Neighborhoods in New Jersey for Investors
Here are five cities or neighborhoods that are great for investors, depending on the amount of capital you have to invest and your real estate investment goals.
Bayonne, located south of Jersey City and Hoboken, has had steadily increasing property values since 2012. Median home values are $373,700, and median rent is $1,695. The city is primed for rapid growth, having approved several housing projects and a new Costco.
Asbury Park, once the less-favored children of neighbors on Cape May, still has lower median home values of $362,300, but is seeing high growth from those looking for cheaper beachfront property. It would be an excellent place for a buy-and-hold investor to investigate.
Atlantic City real estate will probably return a better investment than you’ll get in its casinos. The median home value is below the national median, but residents pay high rents and properties have good cap rates.
If your goal is to take advantage of New Jersey’s high foreclosure rate, take a look at Cherry Hill. Located in Camden County, which has been hard hit by foreclosures, it’s a quick commute to nearby Philadelphia and will attract buyers and renters priced out of other areas.
Elizabeth, across Newark Bay from Bayonne, has median home values of $288,900, which have risen 12% and might go up another 8.0% in 2019. Average rents are between $1,557 to $1,960 and have shown steady growth.
If you have the capital to invest in higher-value properties, New Jersey could give you the returns you seek.
Where to Find Local Investment Property Listings
You can start your search online, looking on websites such as Zillow, Trulia, or Loopnet. Keep in mind that when you shop the MLS, you’ll be in competition with other investors in New Jersey for those properties.
Savvy investors know that if you put in a little legwork, it can yield better results. Pull the city’s vacancy and abandoned property lists, use property tax records to track down the owners and make low-ball offers. Old “for rent” ads will give you the names and numbers of landlords you might convince to sell. “For Sale by Owner” ads on Craigslist could also yield some results.
Multi-family properties can be found on auction websites, such as auction.com and hubzu.com. Some of these sites require that you use a realtor to place a bid and that your funding be pre-approved.
At some point, you’ll want to partner with a local agent, particularly if you’re an out-of-state investor. They’ll have access to listings before they even hit the market, and may know investors seeking to divest entire portfolios if you’re looking for multiple rental properties.
Find a Great Real Estate Agent
A great real estate agent, accustomed to working with investors, knows the best rental markets in the state, can glance at a property’s financials and determine if it’s a good investment, and negotiate a good deal for their client.
If you’re new to investing, you will have a lot of questions that can’t be answered by books. If you’re trying to find the right investment balance, your realtor will help scale your investment property portfolio. Fill out Clever’s online form to be connected with a Clever Partner Agent today. Tomorrow, you could be making your first investment moves in New Jersey.