What are the Best NJ Towns for Multifamily Investing?

57 Replies

Hi BiggerPockets Community!

I am new to BiggerPockets and am exploring investing in multifamily properties in New Jersey. I would love to hear your thoughts on which New Jersey markets are best and why? 

Thanks!

Mark

Hi Mark,


Welcome! There is a wealth of info here and I only wish this place existed when I Was cutting my teeth getting into multi family investing New Jersey!!  :)

To better answer your question I think the answer depends a bit on what you want and your comfort zone, also the rate of return you are willing to accept....

I have been investing in Union county and Somerset county. I use to live in Union county and began acquiring properties that were in my backyard so to speak as I was very familiar with the market and what I can rent these properties for. The other thing which is huge to me as I self manage, is being in close proximity of my properties as the thought of managing something far away does not sit well with me and I prefer to self manage VS give to a management company.....

NJ is a tougher state by default to invest in and generate good returns due to very high taxes and high price points on properties but along with this comes fantastic rental income if you buy the right property and buy it at the right price.....

Don't let that discourage you it definitely can be done. I have a portfolio of multi families, single families and condos all of which produce great cash on cash returns.

Where do you live?  Do you know the market in your  immediate general area? When I first started out I bought a Mother/Daughter - very similar to a 2 family and lived in 1 unit and rented out the 2nd unit... My tenant paid 3/4 of my mortgage and I thought I was a 22 year old genius!!! lol  This allowed me to bank a fair amount of cash and but something else and I was off to the races!!

(EDIT) Just saw you were from Teaneck, that is Bergan county right? my mom has family up that way, nice area!! 

regards,

Chris

Hello @Mark Dresdner
If your looking to invest to the long term then also consider condos. They offer great revenue of purchased st the right price. There's are lots of towns. I have included a list below.

Multi family
Garfield
Lodi
Lyndhurst
E. Rutherford
Wood ridge
Elmwood Park
Fairview(East Of Bergen Blvd Better area, S of Edgewater ave,W Palisades )
North Arlington
Westwood
Edgewater
Fort Lee
Midland Park
Bergenfield
Englewood

If you have questions please don't hesitate to contact me.

@Mark Dresdner - are you looking to house hack? If so, then your determinables might be different than if you were looking for a strict investment property. As @Chris Masons said, taxes make it a bit difficult or riskier if you are not careful so you need to find an investor-friendly agent who can run real comps and give you real options for how the property will appreciate. In Essex Co. you want to stay as close to the train as you can to maximize your rental income. 

It also depends on how much you want to spend in regards to where you might want to invest in a multi in NJ. If you are looking to spend under 200k, you will have to explore towns under the radar or set to grow in 5 years. In towns like Orange and E. Orange, you can still turn decent rents at a low buy in, but you will have to wait on the appreciation a little longer.

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@Chris Masons : Thanks for the advice. Yes, I live in Bergen County. I have heard that from others too that the high prices and taxes make finding a good investment challenging. 

I am looking for a multi-family that doesn't need much work in a solid rental market. I am guessing the cap rate will be around 5.5% to 7.0% for this type of property.

Cheers,
Mark

Hi @Mark Dresdner I have a few investments here in NJ and I gotta say, it can definitely be challenging to find an investment property that will yields a good ROI, however, it is not impossible even in this market.

I've invested in Bergen, Hudson, and Essex county and by far they all have something to offer. Some counties offer a better equity play, other counties may offer a better cashflow return. It really boils down to what's your comfort zone, risk and return, in NJ I have seen 6-12 and even 18% Cash on cash on some of my investments.

Feel free to reach out, I'll be glad to discuss my personal experience on towns, counties, and just real estate... 

Hi All - I am also a new investor looking into bergen county. Originally, my plan was to househack or buy a multi-family(2 unit) and rent out one for income. Late 20s male working in NYC, hope to connect with someone that understands the north jersey market. I've recently went to about 7 places around teaneck with an agent and they were all in shady neighborhoods, not a place i'd want to live myself. Please PM to network, looking forward to it. Thanks!

Welcome to Bigger Pockets Mark,

Depends on what you are looking for as far cash flow, how are you financing, down-payment, rehab cost & can afford, owner occupied or as invetor, and what is important to you in investing.... Just things to think about 1st before even focusing on towns. 

These are few towns that have multiple familes: 

Lodi, Garfield, Lyndhurst, E. Rutherford, Hackensack, Elmwood Park, Bergenfield, North Arlington, Edgewater, Fort Lee, Palisades Park. 

Fasil 

@Mark Dresdner Welcome to BP! I am also interested in hearing other's thoughts on areas. I know there are other threads discussing local meet ups which seem to be popping up on BP more frequently than a few months ago.

What areas have you been looking in so far?

Hi Mark, 

I am looking for my first deal too.  

I live in and practice in Bergen County. 

While I keep a kean view on new small MF listings (3-4 unit) that enter the market, I have also considered and am looking in Western NJ as far as about 40 mins away from Bergen county.  

In talking with investors out there, I found western jersey to be overall on average a bit lower in home value, with similar rents to some B class neighborhoods in Northern NJ (IE Lodi). One thing I would caution you is to understand your vacancy rate if you were to get involved out west. 

The best way to understand vacancy rates is to talk with local investors. I literally called several listing from CL and spoke to landlords to determine their opinion. Also, I would suggest contacting a PM company in the neighborhood your looking to invest in and ask them about what they typically see as their vacancy rate. I always take PM's advice with a grain of salt as they are trying to earn your business so they may over estimate their vacancy rate, IE If they suggest a 4% vacancy rate then I would add 1 or two points to their answer. 


Good Luck on finding your first deal. 

Dr. Anthony Porta  

Hey Mark, 

I'm an agent out here in Northern NJ and I definitely would like to share some areas that are really popular:

1. Newark

2. Paterson

3. Elizabeth

4. East Orange

These are all markets that investors buy strictly for cash flow. This is because of lower prices and higher return on investment. They are not A class or B class areas but there is a huge rental demand because of the low home ownership rate.  

Good Evening,

@Noel Challenger, I am interested in purchasing a rental property in the next 6 to 9 months in Newark, Orange, or East Orange. I am looking near train stations and neighborhoods near nice suburbs (South Orange, West Orange, Union etc). Any tips / tricks you can offer a new investor would be greatly appreciated. 

I agree with all the areas previously mentioned in NJ. There are great long term hold options in East Orange, Orange, Irvington, and certain neighborhoods of Newark. 

Most of the people on this thread seem to live in North Jersey. I'd love to get a meetup together. In either Union County or Morristown. 

Who'd be interested? 

If you are willing to go under the radar and under Trenton, South Jersey has inexpensive options. I have a duplex in Gloucester City, Camden County and have been lookin at more. Lot’s of options for small-ish units and a strong rental market in lots of the smaller Philly burbs.

Although we are investing mostly in Connecticut, since my business partner lives in Carteret-NJ,  Middlesex County,  we are looking to getting more familiar with NJ market.  Following.

I invest primarily in Somerset County.  My partners and I have over a dozen properties now and are looking to add more soon.  We are trying to buy one buy and hold per month.   We own property in a few other counties, I would suggest you invest near you.

@Michael Fiducia I live in Jersey City and would love to join your meetup as I'm also looking to house hack, invest in a multi-fam. I'm a RE agent myself and have done a live in flip w/one of the condo's I've purchased in JC. Please let me know when you guys are looking to do the event as I'd love to help put this together. -Marina

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