North New Jersey

[Anthony Wilson]

Recently moved back to the NYC area. Am looking to buy a duplex, as a primary residence in the next 6-12 months. I would like to be as close to NYC as possible but want to stay within a tight budget. Currently renting in Jersey City (which is an expensive area). Any suggestions in North New Jersey for duplexes in an area that has good potential for equity potential & cash flow. Plan to live in the duplex for 1-2 years before finding another multi family. 

[Mike Teri]

Hi Anthony,

Tight budgets and NNJ duplexes don't go together unless you're ok with higher crime rates and bad school systems. Also, you won't cash flow in NNJ if you're house hacking. The point of house hacking is to reduce your monthly expenses, so it's not realistic to expect to make a profit living in your primary residence. If you ask most small-time NNJ investors today, they are investing for appreciation and are OK with breakeven scenarios on the cash flow side, which is risky even for a stable market like the NYC metro area. As @Shawn Mcenteer said, rent increases in NNJ are almost a guarantee in the NYC suburbs (~45min from Manhattan). 

Based on no information other than "on a budget" and "as close as possible to NYC", I would check out Belleville, Nutley, Clifton, Union County (Rahway/Linden/Elizabeth/Union), Carteret, and Perth Amboy. All have train access (Carteret has a ferry) and you can be in Manhattan in 45min on public transit. You can find some value here in C-class properties since there are emerging B-class areas in these towns. Expect to pay at least $250k/unit for a C-class property here if it's on the market. If this is outside your budget, then I would suggest you look toward the Plainfields (North, South, and Plainfield) and west (Dunellen, Middlesex, Green Brook) which are on the Raritan Valley train line and are ~1hr to midtown by rail, with easy highway access to 78. 

I'm born and raised here and have been investing in NNJ since 2018. If I were going to house hack and wanted to keep my mortgage payment (P&I) below $3500k/mo with a 3-5% down payment loan option, these are the areas I would look at. Buying a C-class fixer-upper will give you some short term relief on property taxes. Taxes are horrible basically everywhere in NNJ worth living in.

Best of luck!