Looking for pros and cons of smaller city rentals in South Jersey

[John M.]

I am currently exploring the idea of perusing properties in what I guess would be considered smaller South Jersey cities. Examples would be Gloucester City and Burlington.

What are the pros and cons of these areas? What are some of the complications landlords face? What metrics are you using to help identify the best neighborhoods?

[Joe P.]

I have a duplex in Gloucester City. I think the small town vibe produces different results. You should be buying for cash flow in these areas because the appreciation isn't like big cities, at least short term, unless some big company comes nearby or the gentrification spreads. I like GC because the proximity to Philly gives it a chance to be something good, like we're starting to see with Camden.

Smaller towns have small town problems, like bureaucracy in inspections. You're also dealing with a blue collar tenant pool, so expect a lot of paycheck-to-paycheck and Section 8/housing assistance. There are pockets of town that are good and some not so good; check in with local PMs or other investors who can tell you where to look.

I don't know about metrics, I'm looking for potentials rents to purchase price in anything I buy...and I want to cash flow so when I perform my estimates, I try to be as conservative as possible.