Hi! 

I'm currently in the process of buying my first multi family home for under 650,000 in Cypress Hill Brooklyn.  I've noticed the value of homes keep going up every year there for the last few years and already kind of late in the game there.  They have gone up so much, I can only afford a single family now for about 590,000 or so. So my question is, should I just buy in a 2 level multi in Journal Square New Jersey for about 585,000 or is Brooklyn still a better investment? Thank you so much for reading and for your time to respond. 

Hello mike, i personally believe journal square is a better route in terms of ROI. It’s a booming area. I never looked into Brooklyn in terms of investing. I’ve seen JS rentals rent for high prices. 2bd 1b $ 1300 - 1800. 3bd 1800-2300

Hi @Mike Cross - instead of comparing prices, why not compare cap rates? If Journal Square is cheaper, but also has a lower cap rate, then your return on invested funds will be lower(should your cap rate calculation bear out.)

The cap rate is just a snapshot of what is, not what will be. The latter is much harder to figure out. As Yogi Berra said, “It’s tough to make predictions, especially about the future.” 

I think the NYC Metro area should continue to drive prices in the boroughs and Jersey City/Hoboken. If you believe NYC will continue to thrive, then you should also believe that prices will increase over the long-term in the NYC Metro area. I’m a bird-in-the-hand guy- if it doesn’t pay me now, I don’t trust that it will pay me later.

@Michael Gansberg thank for the advice, I looked into Journal Square, the taxes every month are killer!!!! Loved the Yogi Bear comment! 

@Juan Cabrera thank you for responding! I get ya, but those  monthly taxes in Jersey are soooo high! It makes that waiting game in Brooklyn seem more attractive, ya know? 

Keep in mind though guys that if you are House Hacking in Jersey you save a ton of money not paying NYC taxes. I literally save $3,000 a year not paying those taxes compared to when I lived in Manhattan. I live in JSQ and yes my property taxes are a little high but about half of what the suburbs are like in Montclair etc.. But if you're not living in it then none of the tax savings matter i guess. Good luck.