Elizabeth, NJ - Rental Market?

Question

Hi All,

I'm looking to purchase a renovated 4family property near Rt 1&9, about 10min walk from the train station. I know the appreciation may not be as good as Jersey city, but we're mainly doing it for the monthly cash flow.  We drove around the area to see what it's like and it doesn't seem as sketchy as some parts of Greenville, JC.  Also there was some talk of foreclosures in the past couple years and it seems as many of these houses were renovated and face-lifted, while there are still houses occasionally boarded up.

1) How is the rental market in this area? Will I have trouble finding tennants, similar to high supply and low demand situation?
2) The taxes are competitively low for this specific house, last updated on 5/31/16. Now that it is renovated 2 months later, is there concern the city will do an assessment and increase the taxes to values similar of the surrounding houses ($10k-$14k)?

3) The selling price is a bit high for the area, about $500k, however, in such a competitive market, off market deals are difficult to come by let alone using an FHA loan.  The rents for this property will sustain the cost of mortgage even with 1 vacancy. Besides the FHA factors/risks, what are the other risks buying at a high price.

Vaughn Smith · Answer

@Jennifer S. @John M. The Elizabeth market is heating up. There is a lot of opportunity as taxes are favorable and pricing isn't out of control (yet) You have to be careful which section you invest in though as the area is still fairly depressed. See below for the answer to your specific questions:

1) Vacancy rates are not outside of the norm for the county or for similar markets in the more desirable areas. Elizabeth has what I would describe as a strong rental community, but market your unit aggressively and develop a solid screening criteria to decrease turnover and the chances of eviction

2) Partner with a Realtor or call the tax assessor to get the up to date taxes on the property, also note that when you make improvements to the house that require you to open permits you run the risk of a tax increase.

Hope this helps reach out if you need anything

John M. · Answer

Hi @Jennifer S.- Did you receive any insight into the Elizabeth rental market?