Good afternoon. We are buy and hold investors in south jersey. Basically row homes 65,000 in cost 1000 in rent. Looking to diversify. Any thoughts about Millville and Paulsboro or any other south jersey areas?
We've talked previously on Gloucester City but not sure if we ever touched based on Millville/Paulsboro. Here's my two cents on both areas since we both manage and own there.
Millville - Fantastic cashflow market. The Good: Purchase prices are low for MFH, taxes are low, and rent roll is decent. If you buy distressed properties the rehabs are usually extensive. Might require rewires/replumbs/etc... Taxes on triplexs/quads are around $5k and under (possibly much less), which is much lower than Gloucester and Camden counties.
The Bad: "C" market with high rental demand but low quality tenants. You'll need to churn through a bunch of tenants before you find the right one. Also I don't bank on property values going up there there are some economic factors that are keeping the prices low. ARVs are also tricky if you plan on refinancing after a purchase. A lot of deals are done with either cash or seller financed so ARVs are depressed.
Overall: If you have cash or a lender for the properties and you have thick skin while not minding to do extensive rehabs its a great market.
Paulsboro - Cashflow but be careful The Good: Good cashflow, low purchase prices, decent taxes. Great SFH buys. Its located in Gloucester County and it could potentially benefit from some of the port & alternative energy investments Gloucester county is trying to obtain. There is higher likelihood of appreciation here than Millville.
The Bad: "C-" to "D+" market. You really need to be ready to deal with headaches in Paulsboro. We have seen many tenants leave Paulsboro for Camden which tells you a lot there. The presence of the chemical plant has always been a turn off for many. There have been a few accidents over the last century and the stigma is still there that area is contaminated or there could be another problem (whether its true or not).
Overall: Be ready for tough tenants, but if you don't mind that it has great cashflow.