South Jersey Rental Market - What's it like?

Question

I've fallen into a sort of 'Trulia Trance' - i.e. checking out various real estate listings on Trulia/Zillow/Realtor for hours - in hopes of finding a good buy-and-hold investment. While i'm particularly focused on the North Jersey market (thanks @Daren Sager), I couldn't help but notice how much more attractive properties seem in the South Jersey/Philly neighboring areas (i.e. Cherry Hill, Moorestown, Cinnaminson, Palmyra, Merchantville) - especially considering price points and taxes. Needless to say, I've done some digging around those communities and i'm generally interested in what i'm seeing BUT I just don't know enough. So, for those people that live/invest around the area - what's it like?

More specifically:

- What is the 'typical' renter demographic?

- Where do they work?

- What do renters demand - SFH, MFH, etc?

- What is the most sought-after community? Why??

Any/all info would be appreciated - looking learning more!

More specifically:

- What is the 'typical' renter demographic?

- Where do they work?

- What do renters demand - SFH, MFH, etc?

- What is the most sought-after community? Why??

Any/all info would be appreciated - looking learning more!

James Masotti · Answer

All of the areas you mentioned are good. Most either work in South Jersey or Philly. Some of the folks in Moorestown or Cherry Hill may also work in Lawrenceville or Princeton areas. You're going to get a large mix of things in Cherry Hill in the higher price points. Moorestown will mostly be high end SFH. Cinnaminson, Palmyra ,and Merchantville will give you a wider mix as they are a little more blue collar communities than Cherry Hill or Moorestown. Moorestown and Cherry Hill East are the better school districts. Cherry Hill West is still good compared to other places, but not quite as good as East.

Not sure if that helps at all, but it's what I can contribute. Happy Hunting!

James Masotti · Answer

Greg N. that buy and hold will be more difficult, although not impossible to due even in South Jersey due to prices+taxes. You'd need to but a good amount down or buy really cheap from a wholesaler or doing your own marketing. I'm looking for buy and hold in Jersey and unless you get to slightly more expensive multifamily units the math is hard to make work just using the MLS. Hopefully you're got better tricks up your sleeve than I do!

For what it's worth most of my buy and hold strategy will be in Delaware where the numbers are much easier to make work.

Greg N. · Answer

@James Masotti - thanks for the demographic advice! Didn't realize that some people around Cherry Hill actually commute all the way up to Princeton for work.

@Nathan Paisley - I definitely agree with your mindset. Based on everyone's advice for investing out-of-state to offset prices/taxes/etc, you REALLY have to be able to get a deal at wholesale prices. So, at this point everything is contingent on me getting a deal significantly below the seller's price (I think I may be on to one).

James Brand · Answer

Hey Greg,

If you are considering rentals in South Jersey, despite the very accurate advice already given regarding expenses, I would focus on properties close to the PATCO speedline. This rail system is a very affordable mode of transit that thousands of commuters use to get into the city. I lived in Cherry Hill for two years and loved commuting into the city that way. Additionally, it is one of few systems that run 24 hours so it is also a fantastic option for enjoying Philadelphia restaurants and night life.

Another option to consider is investing in properties along the Trenton/R7 SEPTA rail line. This train picks up commuters from Trenton all the way down to Philly running along the Delaware river. So your property is practically in NJ but enjoys PA taxes. I think you will find much more favorable holding costs West of the river. Opportunities here will also be closer to you initial area of interest in North Jersey, where I was born and raised btw. Just food for thought.

I am familiar with both of those transit lines and surrounding areas, so if you have any questions feel free to reach out.

-James

Nathan Paisley · Answer

Jersey is expensive... but it's all relative. I've said this before, think like a wholesaler buy like an investor. Have you ever thought about sending letters or calling absentee owners? What if you were able to negotiate 50-60k or more below the sellers asking price in those areas?

Just food for thought.

Those are all great areas to invest in imo, unfortunately I do not have any rentals there but I am doing a rehab in merchantville. Good luck!

Rick C. · Answer

Agreed with @Kevin M. Rooney. If you are going to look outside of your local market, then look outside of the New Jersey. The taxes are too high, at least in the desirable towns, to allow for a decent enough cash flow. If you still want to be able to drive to the property within a few hours, I would recommend checking out communities in Pennsylvania or Delaware.

Kevin M. Rooney · Answer

Jersey is expensive. I own a place on LBI and hard to invest for cash flow. Invest out of state and get more bang for your buck!

South Jersey Rental Market - What's it like?

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