Hey guys,

I'm new to bigger pockets and was wondering if it's worth investing in rental properties is Salem County, NJ? This is where I live so I was thinking it'd be a good place to start. 

My only problem is that I work in the construction industry in Delaware and I notice that droves of people from NJ are leaving the state because of taxes. While my investment may work out in the short term, I'm worried that in the long run people will continue to leave the state and my investment's value will go down. 

Any advice would be greatly appreciated!

Thanks,

Jimmy

Hey @Jimmy Boyle , I am a firm believer in that if the deal is right, than a great investment can be found anywhere. That being said, I think you answered your own question. Why not invest in Delaware where you know the construction code, can improve property and you know people are moving to? If I lived in your area, that would definitely be a route I would explore. That being said, I don't think NJ is dying any time soon, I am up in Somerset County where taxes are nuts and I am definitely continuing to invest, about to buy my 4th deal (fingers crossed it gets accepted!)

Hope this helps, best of luck!

Robert Webb

I agree with @Robert Webb and look at Delaware. You have contacts there and knowledge on where to get purchases. Good place to focus. 

Thanks a lot guys! I really appreciate the feedback.

@Mike Bonadies can chime in on his experiences in Salem County. Regarding Delaware that's my wheelhouse. Definitely a lot of opportunity in Delaware. Non-farming job growth numbers are slightly outpacing the population change at 1.3% vs ~0.9% so that's generally a good sign. While NJ may have growth (I didn't look up the same number) You're probably not going to see whatever the State averages are in Salem County. That being said...I agree that NJ wont go away. It's called the Garden State for a reason and all those farms in Salem County get boat loads of money from the state to stay operating. 

@Jimmy Boyle I agree with what the others have said. If you find a good deal don’t pass it up. I have investment property in northern NJ but the acquisition costs plus taxes are usually too much. Plus as you said people are leaving NJ in the thousands. One county up north had a loss of over 10% population!!! 

Thanks @James Masotti for the mention! 

@Jimmy Boyle   As James mentioned I manage a handful of rentals in Salem County, and lately I've been spending a lot of time down there. First off, I like the approach of investing close to where you live. I do the same, and I specifically moved from Washington DC to South Jersey (where I am originally from) to start investing. That said you need to be careful on where you invest in Salem County as some areas are not a beginner friendly.

The Good Areas:

Pennsville- Really turning around, has a strong rental market, purchase prices are low but rent rolls are very high. There is a reciprocation program between Delaware and Pennsville Township. You can use Delware section 8 vouchers in Pennsville. Watch out for the flood zones though.

Alloway - Super small town but high rental demand due to its proximity to lower Gloucester County and very well regarded schools. Very low purchase prices.

Pennsgrove - Not a whole lot going on in this town but rental demand is strong and purchase prices are low coupled with low taxes.

Woodstown - To put this in the most South Jersey way possible; its the Cherry Hill of Salem County, but lower PP so that means you can actually have rentals.

The Not Beginner Friendly Areas:

Salem City - This is a rough area. I mean rough. Most of the town is D- bordering F town. Some tenants don't have cell phones or internet (I'm not kidding). Crime is rampant. The silver lining is the quantity of section 8 tenants. There are a lot so once you get a tenant they are likely to stay and always pay. Purchase prices a very low here so its easy to get tempted but there are a lot of costs of doing business in Salem City. If you have a good property management structure or you can do repairs yourself this town can be much more appealing as it requires a more active investor.

Quinton - Same problems as Salem City.

As for the population of Salem County. Its been stagnate at ~60k people since 1980. Salem is still a county so unless NJ decides to redistrict there will always be county and state jobs. Plus the nuclear power plant, the ports, and DuPont have also always provided steady employment.

Best Luck!

I have a duplex in Salem city and like Mike said, the city is very rough. I like D properties so the place is up my alley. There is great cashflow but I expect absolutely no appreciation there. Also, most lenders wont let you cashout there and the few that will can only appraise your building for $15k because of all the foreclosures. 

Sorry my @ isnt working on my phone.

@Mike Bonadies , that is the best description of Woodstown that I have ever seen.