North Jersey and the 2% rule

[Daniel Kurnath]

I know that in certain markets expecting a 2% monthly rental/purchase price is unrealistic. I've been evaluating properties in North Jersey in towns like Wayne, Parsippany, Rutherford, Nutley, Summit, Cranford, Westfield, Montclair, Vernoa, and Weehawken. I don't see anything approaching 2%, what percentage do other investors in this area typically consider to be an acceptable monthly income/purchase ratio?

[Kevin Hill]

You would be lucky to find something that even met the 1% rule in those areas. Those are all high end areas for the most part. I would look for something that just had positive cash flow. Or look for something you can really add value to (ex ability to add a bedroom, add square footage or rehab).