Property tax for rental property in Hoboken NJ
5 Replies
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Lance Yang from Hoboken, NJ
posted 22 days agoHi All,
I live in Hoboken NJ and own my primary residence. Currently I am paying 6k per year property tax for my home. I plan to invest in a rental property that is similar to my residence. After reading some articles online, I found that property tax for rental properties is about 2-3 times the primary residence. If that is case, monthly property tax for the rental would be 1k - 1.5k. It seems there is no way to make any positive cash flow given the property tax. However, there are many apartments rented out in the community for 2k. Did I miss anything here?
Thanks much,
LY
Patrice Penda Investor from Hoboken, New Jersey
replied 22 days agoHey @Lance Yang
Properties tax are not a function of the usage of the property.
They vary from one town to another and they can vary significantly. My impression is that relative to house prices, property tax in Hoboken are not too high compared to other towns. But it is just an impression, I never really looked at the data for property tax for Hoboken in detail.
Are the properties you are looking at for rental in Hoboken? Properties don't cash flow in Hoboken. So it doesn't surprise me that you have rented apartments rented for 2k when it doesn't seem to be enough to cover all the expenses.
People have been investing in Hoboken for price appreciation which in the past years have, by far, exceeded cash-flows returns investors made in other places.
Basit Siddiqi CPA/Investor from Brooklyn, New York
replied 22 days ago@Lance Yang
Property taxes can be lower for those that live in the house than those that rent it. Certain counties provide a homestead exemption which lowers the base on which they apply their property tax rate to.
If the property taxes are high in the area - you have to account for that when you make a decision to have an investment property in the area or not.
Areas with high property taxes likely also have higher rents.
If you still can't make the numbers work - You may want to look for another area to invest in.
NYC and some surrounding areas(such as hoboken) are hard to find cash-flowing properties.
Lance Yang from Hoboken, NJ
replied 22 days agoOriginally posted by @Patrice Penda :
Hey @Lance Yang
Properties tax are not a function of the usage of the property.
They vary from one town to another and they can vary significantly. My impression is that relative to house prices, property tax in Hoboken are not too high compared to other towns. But it is just an impression, I never really looked at the data for property tax for Hoboken in detail.Are the properties you are looking at for rental in Hoboken? Properties don't cash flow in Hoboken. So it doesn't surprise me that you have rented apartments rented for 2k when it doesn't seem to be enough to cover all the expenses.
People have been investing in Hoboken for price appreciation which in the past years have, by far, exceeded cash-flows returns investors made in other places.
Thanks Patrice, for the information that the usage of property is not a driver for property tax. I visited the city of hoboken tax collection website and checked out some records, and it appears that if I rent out my existing property it will still have the same property tax, which is a relief. Yes, I am considering Hoboken for rental property investment because it will be easier for me to keep an eye on in the near future. I am not planning to move out in the next five years. I have never rented in Hoboken but it is difficult to ignore all the "for rent" signs on every single block lol. My goal is to buy and hold so price appreciation is icing on the cake.
Lance Yang from Hoboken, NJ
replied 22 days agoOriginally posted by @Basit Siddiqi :
@Lance Yang
Property taxes can be lower for those that live in the house than those that rent it. Certain counties provide a homestead exemption which lowers the base on which they apply their property tax rate to.
If the property taxes are high in the area - you have to account for that when you make a decision to have an investment property in the area or not.
Areas with high property taxes likely also have higher rents.
If you still can't make the numbers work - You may want to look for another area to invest in.
NYC and some surrounding areas(such as hoboken) are hard to find cash-flowing properties.
House hacking is out of question for me so I will have to deal with higher than average property tax. True that this area has high barrier to enter but it is easier to rent out. Being able to sleep at night is important to me too....lol
Patrice Penda Investor from Hoboken, New Jersey
replied 22 days agoCool @Lance Yang .
Hoboken is such hot market that you'll have no problem to find renters, should you go ahead with that plan.
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