Best Towns For A 1st Time Investor In New Jersey To Invest In?

Question

I'm starting off in real estate and I am looking to invest in a single-family house & rent it out - I wanted to know what others think are the best towns & cities for investing in a property for stable rents and appreciation or how do you determine if a city/town is a good place to consider investing in?

Joseph Guzzardi Jr · Answer

@Jared Curry any particular reason why your focusing on single fam vs multi? Should look at population increase, job growth or future plans of infrastructure, transportation, redevelopment etc... A nice tip is to go into Google alerts and type in words such as "{city/town} approves".

Shawn Mcenteer · Answer

@Jared Curry when I first started investing in NJ I to wanted a single family buy and hold.  My wife and I ended up buying one, long story short I found biggerpockets and got in relationship with like minded people from the forums.  Fast forward 8 years later we sold the sing family a while back and mainly focus on buy and hold multi families.   At the end of the day singe families are tough in NJ for buy and hold but multi families have huge potential if done right.

Gregg Cohen · Answer

Hey @Jared Curry - congrats on jumping into the rental property investing game!  The way to win in rental property investing is to buy and hold for a full market cycle so you can maximize your return on investment from all 5 profit centers.  Choosing the right market to invest is a critical piece of the equation as some market are cash flow heavy with little/no growth and some are appreciation heavy with negative cash flow.  You want to find a market that has both.

Here's what to look for:

- Low home prices.  The median price of the market you're considering should be lower than the US median (roughly $365k.)  Check your local MLS for your median home sales price in your market.

-High rents.  The median gross rent should be on par or above the US median gross rents.  Check the US Census.

-Above average home price appreciation rate since 1991.  Your market's long-term appreciation rate over a full market cycle should be above the US avg home price appreciation rate (3.6%).  Look this up on the Federal Housing Finance Agency's site - www.fhfa.gov.

Most investors get the first two but miss the mark on researching appreciation rates.  However, this is a big mistake because home price appreciation will be the biggest contributor to your overall return on investment over a full market cycle.

I invest in Jacksonville, FL.  27% lower home prices, .3% higher rents, and 19% higher avg appreciation rates than the US.  Best of both worlds - positive cash flow and growth!

James Wise · Answer

Many cities and towns available for people like you. Cleveland is my stomping grounds so I lean that way and if you are interested in learning about that city you'll want to read The Ultimate Guide to Grading Cleveland Neighborhoods. I also have similar guides that you may want to look over for Kansas City, Missouri. & Birmingham, Alabama.

But here is the thing. Cleveland ain't special. KC ain't special. Birmingham ain't special. All the markets below will offer you essentially the same type of product and returns.

• Cincinnati, Ohio
• Dayton, Ohio
• Toledo, Ohio
• Youngstown, Ohio
• Cincinnati, Ohio
• Memphis, Tennessee
• Saint Louis, Missouri
• Indianapolis, Indiana
• Detroit, Michigan
• Erie, Pennsylvania
• Louisville, Kentucky
• Milwaukee, Wisconsin
• Jackson, Mississippi

It's about WHAT and HOW you buy in an area. Everyone of these areas will have places where the wealthy live, places where the middle class live and places where the poor live. What are your goals? Do you want to rent to the wealthy, middle class or the poor? Going into something thinking your renting to middle class but you are renting to the poor is how people who are out of state get in trouble. Nothing wrong with working with the poor, wealthy or middleclass folks but you need to make sure you are paying the proper price. Can't pay a middle class price for a house that rents to the poor.

Ian Walsh · Answer

There are tons of areas in NJ that have the possibility of strong investments.  It depends on your end goals and what you are looking to achieve.  Trenton is a different vehicle than Princeton but both places have investments that someone can make a lot of money with if it fits their goals, personality, resources etc.

Jonathan Greene · Answer

So many factors go into this. Where do you live? How will you manage the property? What is your budget? Are you more interested in cash flow upfront or long-term appreciation? Are you comfortable doing some work to get a house ready or do you want something turnkey? Until anyone knows those things, they can't guide you to the best market in NJ for what you want to do.

Best Towns For A 1st Time Investor In New Jersey To Invest In?

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