How's the current Union City, NJ Area market?

41 Replies

Hello everyone!

I'm looking at properties in the Union City area, including Jersey City Heights, West New York, and North Bergen, but focused on Union City mainly for the short commute to the city. I live in NYC and grew up in North Bergen so I'm familiar with the area but not necessarily the real estate market. I'm currently looking at multi-families (likely to house hack) but most modest duplexes are going for 499k+, which is right at the budget I set for myself. I'd go slightly higher for triplexes and whatnot, but those seem rare. 

Do any experts from the area have some advice on how the market is doing? Is it still worth it or should I look elsewhere? I'm going for rental income rather than appreciation. Should I also start looking at "as-is" homes? My dad's also been in construction for 30+ years and can easily work on fixer-uppers, but I'm generally risk-averse (and it's my first property) and don't want to encounter a host of unforeseen issues. But I do want to leverage his expertise.

Any and all advice is appreciated!

Thanks,

Seb

@Sebastian Garcia a lot of investors are buying in union city.  If you are the first time home buyer, be careful with buying as is; check with city for any open permit or violations right after the offer is accepted. The city takes time to provide documents. When you are looking for fixer- uppers, just keep in mind that union city takes very long time to approve permit or pass inspections. 

You have a good budget for the area; you should be able to find things in a decent condition.

Union City is good for the reason you mentioned. Huge potential, but the UC government is conservative for development projects, unlike JC.  Rent control is bad for landlords, but it exists in NJ and you need to deal with it.  If the total income works, rent control is no problem. 

Actually, I plan to sell a 4 family in Union city with a good income and low expenses.  

Will then buy a bigger one in Jersey city or Bergen County. 

Your Budget is a good range, are you working with an agent that knows the area and is also an Investor? I say that should be your next step as they will know the market. If you are focusing on rental income and not much on appreciation you should try to take a look at other surrounding areas.

Best of luck.

I own a 2-family in Union City and getting anything done with the building department takes forever. The city and government there cater to the low income renters  that have been there a long time, making it difficult for the city to experience the same kind of growth and changes that you have seen happen in JC. Airbnbs are illegal there as well. 

@Sebastian Garcia , not sure if you are still looking but a little advice/experience for you and others who may end up here. So, I do not own a multi-family home in Union City, but I tried for the longest time to do exactly what you were trying to do. A house hack on a multi-family home. For those of you who do not know what this is, it is when you use your FHA loan to buy a multi-family property. Amazing strategy, truly, but it is nearly impossible to get this done in that section of New Jersey (mainly Hudson county). The main reason for it being nearly impossible is due to something you won't realize until you actually get involved. And believe me I was heavily trying. I went to see homes almost every other day with an amazing realtor who is a decent friend now. We must have put in 8 or 9 offers some above the asking price to be more competitive. But every single one fell through. And here is why.

Hudson county is so hot right now with real estate that you are literally competing against investors from all over the world. I am not kidding about this. If a place was even remotely decent you would have an all cash buyer come in within 10 days max. The turnarounds on these decent places was almost un-real, and probably still is as I do not see this market slowing down. That being said, if a place was put on the market today that seemed good and it hit my numbers I would see it the next day and put in an offer the day after that if it sufficed. That would be 2-3 days on market. But still an all cash buyer would come in a day or two after that to ruin my hopes of a deal. There were other instances where investors would get in a bid war and drive the price up 30k+ past the listing price. 

Now, all that being said. I am trying to tell you that house hacking is hard to do in Union City because 3.5% just isn't competitive enough against these all cash buyers. But, there are deff places available that you can grab. From what I noticed though, these places just don't produce the numbers you need to not just make money, but to even get the loan from the bank. This is because FHA requires that revenue is 25% higher than all costs (including mortgage, taxes, monthly costs, etc.) on a multi-family home. So, you basically need at minimum a 25% margin. Not impossible to find, but hard, and when they are available you can almost guarantee they will be sold within the week.

Bottom line, if you want to get involved in Hudson County (more specifically Union City as this is where i have studied the most) you deff can by either getting other investors involved for a multi-family to be competitive against all the sharks or just simply buy a single family apt/home. This is what I ended up doing. Just got an accepted offer on an 800 sq foot apt in Union City for 250k 10% conventional. I plan on living there for a little bit, maybe 1-2 years. Save up for another down payment during this time. Rent out the property I just bought and continue that process. Homes appreciate like crazy in Union City, so I really just wanted some of my money in Union City because like I said, this market won't slow down until prices match Weehawken and Hoboken. 

I know this is a long response but could be muchhh longer lol. If you have any questions about Union City/hudson county area message me. Would love meeting another investor in the area!

Good! And getting better. A bunch of developers that tapped out JC development opportunities moved to UC. i can go on forever about this area, too! Feel free to message me with any specific questions. 

UC is great. I’d buy there for long term appreciation. 

Don’t let the difficulty of the hunt deter you. It makes it all the more lucrative when you do find something.

My last 3 deals are in Bergen and Hudson county. A 2 unit in JC that I bought for 83% of appraised value. 1 piece of land for 65% of arv and another for 55% of arv. 

The key is to be very active. You'll find your deal. You can pay a little more than most investors and use fha funding. It might be hard on MLS properties but you should focus on more "off market" & big rehab projects.

Overall market is a bit cool in Hudson , no?    Still sell fast ?  Many multifamily are listed on mls for a long time without selling.   But all are priced a bit high.  

I agree with @Ethan Smith .  Def super hot in the area, but I've seen some multis sitting on the market for 45+ days at this point, and like @David Flores I've been scorching the Earth looking for a deal.  It's hot but has slowed down a bit.  Either way if, keep analyzing and if you find something that hits your numbers go for it!  

I've looked hard on BP about Union City, and it seems to be one of the tougher cities for an investor from a municipality standpoint.  Will be interesting to see how new ordinances affect prices.  

So what cap rate do buyers seek ? 

Union city is a rent control city,  similar to many many nj towns.   Nothing bad or good in particular. 

And many condos are being built.   Some 2-bedroom sells above $700k.  You get the idea. 

Very important thing to know about Union City though. It is rent controlled, I believe you can only go up 7% in a single year. But there is an exception an exception regarding owner occupied homes. If you owner occupy a a duplex or a tri-plex rent control cannot dictate what you want to do. You can raise rents 20% each year if you wanted. 

Rent control is also a very broad term. In Union City the rent control is this. You can only raise rent by 7% YOY to an already leased tenant that wants to stay. If they don't stay and you need to get new tenants you can now re-make the price of rent to whatever you want. 

From what I have seen, Union city becomes very very hot  this year. For an average condition two family house, if it is priced under $500k, it would be gone in a week, with multiple offers. If it is renovated in a neat condition ( not the gutted ones),  $600k would be an easy sale. But I think a lot of buyers are investors. They are very rational and numbers driven. houses above $650k don't move that fast. 

@Sebastian Garcia  Triplexes (as well as quadruplexes) are not rare in Union City, I personally own two properties in the same units category in the town. 

It appears to be among the towns most rich on 3-4 family properties in NJ. The latter seem rarer in West New York and North Bergen and then Jersey City is rich on them as well. Multifamily properties in general are a characteristic of densely populated urban areas, and Union City is definitely no exception to this.

@David Flores Your description of Union City's rent control rules is not accurate. Please see the following link for the exact set of rules as of 2017 with a 2018 amendment:

Union City Rent Stabilization Ordinance 2017

2018 amendment

@Sebastian Garcia sounds like a good start contractor in the family. Money to make the deal . NJ works cause most of the properties I watch cash flow. Not like Brooklyn nyc they appreciate with little to no cashflow. The area you are looking in is hot now. lf you find a deal use all your resources to make it happen

Originally posted by @Stefan Tsvetkov :

@Sebastian Garcia  Triplexes (as well as quadruplexes) are not rare in Union City, I personally own two properties in the same units category in the town. 

It appears to be among the towns most rich on 3-4 family properties in NJ. The latter seem rarer in West New York and North Bergen and then Jersey City is rich on them as well. Multifamily properties in general are a characteristic of densely populated urban areas, and Union City is definitely no exception to this.

@David Flores Your description of Union City's rent control rules is not accurate. Please see the following link for the exact set of rules as of 2017 with a 2018 amendment:

Union City Rent Stabilization Ordinance 2017

2018 amendment

Looks like you can only raise 3% per year if it's a rent-controlled as per 2017 ordinance. Also, with the amendment non-occupied 3-units or higher amount of units are rent controlled. Did I miss anything? 

Yes, correct. Currently non-owner occupied 3-units or higher are rent controlled in the town. Permitted increases are 3% or CPI whichever is lower.

Was not sure what the increase was but the rest of my statement holds true which is very important for this discussion. If you are owner occupied on a duplex or triplex you are not held to rent control in union city. And if your tenants leave and you get new tenants you can increase the rent to whatever you want. So if you buy a vacant property with no tenants you can make the rents to whatever you want. You are not bound to a 3% increase from the previous rents. That only holds true for current tenants living there. 

@David Flores Starting with the 2018 amendment indeed the statement "If you are owner occupied on a duplex or triplex you are not held to rent control in union city" became true. Formerly, upto 6 units owner occupied were not subject to rent control pre-2017 and upto 4 units owner occupied starting 2017. 

I do not believe vacancy decontrol has been introduced in the town. As of latest, merely changing tenants does not decontrol the property in Union City. In the case of a vacant property not previously registered for rent control, yes, you can initiate the rent at your desired level.

@David Flores Not sure what you mean. Permitted increase will be less than 3% currently as CPI for the New York-Northern New Jersey Metro Area, which is the referenced index in the ordinance, has been consistently below this mark over the previous few years.

If you buy a vacant property, you may or may not be subject to the limit dependent on whether the property has been registered with the town's rent control office.

Union City real estate market is on fire now!... and with no sign of slowing down, especially now with Husdon Yards, literally 10 minutes away (door to door). I can confidently say this because I was born and raised in Union City and I have never seen so much recent development so quickly. I live on Park Avenue on the Weehawken border and literally every day I now see new shop, restaurants, condos, parks, etc. all going up. If you are lucky enough  to find a property, definitely buy and develop it (despite any permit delays). My home tripled in value since I bought it in 1998. Hope this helps.