Buy & Hold In NJ - Taxes Kill Cash Flow?

3 Replies

Hi NJ Landlords. I'm new to real estate and have been trying to get into buying rental properties in NJ. Here's my dilemma - every property I analyze does not seem to cash flow. I think NJ taxes are killing my numbers. Can any NJ investors help me out by sharing some of their deals and what their numbers look like? Are there specific counties, areas, types of properties, etc. that I should be looking at (what are the best places to invest)? Any help is much appreciated. 

Hot markets like this are a tough time to buy a property that will cashflow in NJ, 2011 was a great time.  You don't generally find great cashflow in areas with great appreciation potential. Taxes are what they are, an expense that should be built into the rent creating a level playing field for all landlords.  

Identifying a gentrifying area and hoping for increased rents in the future is one way to buy now. My 2004 purchase did not cashflow until recently, but the area is now hot as prices rose out of reach in other areas. The monthly rose from $3000 to $4300, and that is about $250 under, as a longtime tenant is not yet up to the new market.

Thanks for the response. I have trouble counting on appreciation when investing. I'm glad it worked out for you, but my crystal ball seems to be broken right now. I know the market is pretty hot, but surely there must still be viable rentals out there.

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NJ simply isn't Texas or the midwest in terms of easy cashflow. Looking for cashflow will take you to some pretty downgrade neighborhoods, if you have the stones for that. I don't, dealing with the legacy tenants that came with my properties in gentrifying areas was bad enough.