New Jersey Piscataway Property around Rutgers

Real Estate Deal Analysis & Advice
12yFollow

New Jersey Piscataway Property around Rutgers

Steven Yang
Real Estate Investor · Harrison, NJ · Member since 2013 · 17 posts · 2 votes

I recently came across the following deal and thought I would share with everyone here and get some feedbacks on it.

Single Family with 3 bedroom - of which one is master with its own bathroom. other than that the house has another 1.5 bathroom, 1 living room, 1 kitchen, no garage, but a private driveway. 

Financial is as follow:

listing price: $310,000

property tax: $ 6,500

potential rental: $2,200/month

With 20% down payment, the cash flow would be about $455/month, or a ROI of 0.734% per month or 8.8% annually.

obviously, the 50% rule does not work here, but i found that to be the case with most properties around new Jersey. This particular property is in a very nice, safe neighborhood and very close to Rutgers. 

Any feedback or critic are welcome.

Many thanks,

Steven

0Reply
29 views

Most Popular Reply

Kurt Naletko
Clifton, NJ · Member since 2014 · 61 posts · 20 votes
12y

The house will almost certainly need above average repair between tenants. If you are looking to capitalize on the "Rutgers market" I would look across the river, while the properties are a bit more expensive, the rents are SIGNIFICANTLY higher, even off Cook/Douglas Campus. The vast majority of student would not consider renting in Piscataway.

This comes from my experience as a recent Rutgers Alumni

1Reply
See this reply in the discussion

7 Replies

Jump to latestLatest
  • Shawn McenteerBusiness Member
    Realtor · Boonton Township, NJ · Member since 2013 · 2k+ posts · 1k+ votes
    12y
    Steven Yang those numbers look very similar to my current residence. With that being said it would be very tough to make money on my property as SFR. Make sure you account for capx, vacancy. Have you ever given thought to MFR? In Norther NJ area MFR will have a far greater chance of producing then SFR.
    973-975-3895
    House Hacking New Jersey563 Reviews
    WebsiteView Page
    0Reply
  • Kurt Naletko
    Clifton, NJ · Member since 2014 · 61 posts · 20 votes
    12y

    The house will almost certainly need above average repair between tenants. If you are looking to capitalize on the "Rutgers market" I would look across the river, while the properties are a bit more expensive, the rents are SIGNIFICANTLY higher, even off Cook/Douglas Campus. The vast majority of student would not consider renting in Piscataway.

    This comes from my experience as a recent Rutgers Alumni

    1Reply
  • Elizabeth Colegrove
    Hanford, CA · Member since 2013 · 5k+ posts · 1k+ votes
    12y

    @Steven Yang 

    My husband and I invest in Class A homes. They are slight cheaper with much lower taxes. on the other hand we have found that this higher cliental of professionals require less repairs and we have had no vacancy between tenants. I love these types of houses as they both appreciate in house and rent value. On my website I am creating, I talk all about our model, strategy and how we rent to this group. 

    I would be worried about the high taxes. Our's are all about 1/3 of those costs.

    0Reply
  • Harvey Greenstein
    Real Estate Investor · Somerset, NJ · Member since 2013 · 18 posts · 4 votes
    12y

    A few things to think about. The most I have been able to get in rent is $500 a person around RU, and that is only if it is within walking distance to a RU bus line. Most kids want to live around the night life which is Easton Ave. You can get students that want a quieter life further from campus but not at over $500 per person. 

    I don't see how you are coming up with positive cash flow, maybe you are missing repairs , lawn care, and administrative cost. 

    1Reply
  • John Papa
    Investor · Westwood, NJ · Member since 2013 · 14 posts · 8 votes
    12y

    Steven,

    I would always run my numbers assuming you are financing 100% of the property.  That's when you see if a property really cash flows.  If you need to cough up cash in order to force cash-flow I would not proceed.

    Also, when calculating your annual gross income assume you are only collecting 11 months rent.  

    When you run the numbers applying those rules the property doesnt look that appealing.  At least not to me anyway.

    1Reply
  • Mike C.
    Englishtown, NJ · Member since 2015 · 11 posts · 1 vote
    11y

    I know New Brunswick well, best bet is to stick with 2+ Family rentals for New Brunswick and anything within walking distance to the school since not all students have cars. $455 a month is cutting it very tight per month, you have one incidental and your cash flow is gone. 

    0Reply
Join the conversationCreate a free account to reply, vote on answers and follow this thread.
Log InJoin for Free