Should I Invest in Northern New Jersey?

Question

Is it worth it investing in Northern New Jersey, I want to start investing into rental properties but don't know if its a good idea to invest in Northern New Jersey. I know it's possible, but does the cash flow add up, I want to invest into properties around Nutley, Garfield, and Clifton. Are property taxes just too much ? Any tips or suggestions for newbies would greatly be accepted.

Brian Liscio · Answer

NNJ is a great rental market. In all classes. Just look close at the numbers. Can’t stress enough not to leave anything out.

Too many guys call it investing just because they think that’s what they’re doing.

All the numbers count; including taxes and repairs.

If the price works for your master plan just pull the trigger.

Wow just looked up at what Pete said.

That was my point about too mant guys..

Remember you make money when you buy.

Lino B. · Answer

I am renting a townhouse in Nutley that I lived in for a couple of years. The cashflow is positive (~400/mo) despite all my costs, HOA etc.  I am paying it down; long term is my plan here. I bought it in 2013 so it has appreciated a bit too.... I am thinking if I bought my unit today my cashflow would be much lower.

Taxes in Nutley (or north jersey anywhere as we know) are brutal . (11k+). It is a great town that is desirable but I am not handy nor in the know enough to flip in additional to what I am doing. I am happy with a good tenant and + monthly but I will reevaluate when the lease runs out in March. I think I am better moving my capital elsewhere.

Mateusz Prawdzik · Answer

@Christopher Lugo Clifton, Garfield great for rentals as taxes are lower than most areas of NJ. Nutley is definitely more a flip market. I have never done anything in those any of those areas but now plenty of people that have. I am looking at a commercial unit in Garfield right now, but nothing set in stone just yet.

@Peter Banyan What you said is correct, if the numbers work, Buy, rehab, Rent, Refi and move on. That is the name of the game.. With that being said, even though that is the name of the game, it's EVERYONE'S game now so finding discount deals is almost slim to impossible, and if you do it's very rare. You have to look for deals off the market. So right now a lot of people are buying just to buy and say that they are in the game because "FLIPPING HOUSES IS COOL" hahaha. But yes, if you can find properties for that kind of discount definitely do it.

@David Weintraub Thanks for directing people towards me, you're the best. Appreciate it

Peter Banyan · Answer

yes, if the purchase $, taxes and possible rehab costs are

fully known the math will determine the ROI.

Robert Murphy · Answer

Jake is right that flood insurance cost is going up on the National flood insurance program however, most of the FEMA maps are old (very old) and some properties are paying more then they could if they were to move the flood insurance to the private market (however if the property has had a loss within the past 5 years) the only option is the government option. (NFIP/FEMA) in these cases, I would suggest unless you are going to do the flood mitigation (sometimes raising the structure in the air out of the flood zone) these should be avoided unless you have an investment strategy to demolish and rebuild. Let's face it we humans love to be by the water but that comes with risk. Many of these homes were built in an era where they didn't fully understand the potential of flooding. Some have a higher risk then others and the private flood insurance uses the latest technology to rate the risk some areas you can get great deals ($500 -900 for great coverage) others can be +1500. You also need to work with a seasoned flood insurance expert. I can't tell you how many times I run across a policy that was written wrong and the client has been paying higher premiums then they should but their agent doesn't know. Work with someone that know flood insurance a good question is to ask how many "FLOOD" policies they have (under 700) not an expert.

Let me know if you think you are paying or getting a quote that is too high we can see what we can do for that.

Daniel Gonzalez · Answer

Currently saw a few four families pop up in north arlington and belleville. I cannot comment on the numbers for those properties, I just wanted to throw it out there. I would also keep in mind the option to do a live in flip or househack. I'm not sure about your particular situation but I wouldn't rule that out. Might be a good way to get into some investments with better financing options.

Chris Toedter · Answer

There are more towns in Northern New Jersey that have great rental, like Carlstadt (commuter town), Garfield has SUPER low taxes but no property every town has its pros and cons.

Mateusz Prawdzik · Answer

@Jake Recz IF you find a house in garfield for 50k... send it to me. I have never seen them yet so I can tell you what's going on. Regardless most of my deals are pre listings or off market deals. I don't get into bidding wars, not worth the time if I know there will be another deal down the line where I can buy for 50-65 cents on the dollar.

Jake Recz · Answer

@Mateusz Prawdzik You cracked me up with the line where you said that "everybody is buying now because flipping houses is cool" haha You are so right... SO many people buy just to buy, or want to buy just to buy. I was explaining to a friend not long ago how a house that she was looking at is NOT A DEAL. I spent 5 minutes looking at the property, thats it. The numbers would be in the red, big time. The house needed to be teared down. She said it doesn't matter because it will appreciate! No it won't... Not in that area. I know for sure the flood insurance will go up though! Some people just don't get it. It's a numbers game.

You mentioned a deal in garfield. What's going on there with those $50k houses popping up on MLS? Do you know? They want to start a bidding war or are those the ones affected by the chromium?

@Christopher Lugo I was looking at a deal in West Milford recently. That's really north north NJ. Everything looked good. All until I looked on craigslist at houses for rent in the area. Low supply, low demand, low rents. Good safe, quiet area. $60k house in north NJ looked like a steal but all it would be is a trap. I'm only mentioning this because west milford is within a half an hour drive from the areas that you mentioned.

@Brian Liscio is right on the money. Look at the numbers and don't leave anything out. Garfield is good, where it doesn't flood. If it floods, you need flood insurance and costs of that are going up enough every year to eat up your cashflow within a few years. Just because a house cashflows today doesn't mean it will cashflow 4 years from now. Everything has to be looked at very closely.

Should I Invest in Northern New Jersey?

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