Reasonable Cap Rate in Camden New Jersey

3 Replies

Hello, I have a duplex in Camden NJ that has recently been renovated and is fully rented. My property manager has suggested an unrealistically low price based on limited comps of duplexes in the area.  I would prefer to price based on the income approach using a reasonable cap rate.  What is a reasonable cap rate for Camden NJ?

Hello Graylind- i live in NJ but have no investments in Camden. It is a really tough area a lot of people wont invest there. Just a rough estimate would be in the high teens to 20% for a cap rate. I would assume the high # of foreclosures would lower the comps. 

I don't reckon @Stephen S. will sympathize much with you. Here is his thread about his "how-do-I-un-own" property in Camden from 2 years ago - still unresolved as far as I know. Interesting read:-

"Unrealistically low price based on limited comps of duplexes"? More like: REALISTICALLY low!

Without knowing your specifics, there's nothing so far to suggest your property manager doesn't know what they're talking about. (Sorry to have to tell you that). But, welcome to BP! All the best...

Hello and welcome to this website!  It varies and it is what the area is using and it is a rule of thumb that does not typically a rule of thumb measurement that other owners use.  Yes, there seems to be many competitors in that state based on what I have seen.  I would tend to look for 10 to12 percent but would look heavier at return on cash put in returns and positive cash flow.  The regular anaysis math that considers all income and expenses including debt.  Make sure all income and expense regular and are irregular like seasonal stuff and unusual capital expenses. Make sure that you are consider actual and not pro-forma. Good luck to you!

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