Seeking Real Estate Agent/Property Manager in N. New Jersey

General Landlording & Rental Properties
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Seeking Real Estate Agent/Property Manager in N. New Jersey

Jeremy Spiegel
Investor · Member since 2017 · 4 posts · 3 votes

I am considering buying a beautiful longtime family home in Montville, NJ and turning it into an LTR. I live out of state (I own several out of state properties) and need local intel. 

The house is a corner property, set back from the street on a well manicured lot, in an upscale neighborhood with excellent local public schools. It's a 3 BR 2 BA split level house with a screened in back porch, 2 car garage, fireplace, hot tub and convenient to NYC, Morristown and many other key locations. 

It's ideal for a young family and/or professionals. I am looking for input on whether this is a good rental market for single family homes. My preliminary research indicates there are rentals and decent comps I can use but I am looking for an expert on the rental market in this area for guidance.

Appreciate your input!

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  • Natalie Schanne
    Real Estate Agent · Princeton, NJ · Member since 2016 · 1k+ posts · 1k+ votes
    5y

    @Jeremy Spiegel - Unless you get a great deal (meaning your family member or estate sells for below market value), the chances that this property cash flows well and provides you with a great return on equity is very low.

    If your family member or estate has a house for sale, prices are top of the market now given low inventory and low interest rates. They should sell to a home owner occupant for top dollar (think peak 2005-2006 prices) and invest or distribute that cash. I do not predict prices to continue to rise like they have been. Most areas in NJ and elsewhere went up 10-15% this past year. I’m driving around with my buyers and almost every attractive home listed on a Thursday or Friday is under contract with highest and best by Monday or Tuesday. I was notified that a $750,000 house I was showing had 65 showings that weekend and 9 offers already and to please submit highest and best by Monday at 5pm. Each house seems to be going for 10-25k over the last highest comparable sale.

    New Jersey is the land of high property taxes and high labor costs. Fortunately we also have many high paying jobs. You will find managing from out of state that it costs $200+ to send a plumber to plunge the toilet. So if the house is worth $300,000 and has $8000 of property taxes, even a $3000 (1%) rent doesn't pay off very well in terms of ROI. 36000-8000=28000-30% expenses inc vacancy and leasing, = 19200 left. $300,000 home with 4% investor loan and $75,000 down. After PITI let's say that's another 1200/mo (minus insurance) so 14400/year. So your ROI is about (4800 plus any mortgage paydown)/75000 cash or 6.4% ROE. Chances are your $$ in is higher with closing costs and minor rehab so maybe all in for $90,000, making your roe lower. Also, most places do not rent for 1%. I saw a listing for a $1m home renting for $4500/month. Condos costing $290k with $7500 taxes and $315 hoa rent for $1900 which is breakeven with a homeowner loan. So, if prices are top dollar, sell and rent elsewhere.

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  • Shawn McenteerBusiness Member
    Realtor · Boonton Township, NJ · Member since 2013 · 2k+ posts · 1k+ votes
    5y

    @Jeremy Spiegel what is your goal with this property?  I'm in Montville all the time, wonderful town but not exactly an investors go to spot for long term rentals.  My concern will be purchase price and return for you but before I give input I want to know more about your intentions and what you are looking to get out of this property.

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