A few years back I owned and operated a small insurance business. When I opened the place, I had come off a 10-year stint in sales and, more than anything, I felt relating to people was the key to my early successes. In fact, that sales job was so easy that I just showed up for work each morning, did what I did best, and called it a day. Starting the insurance business changed all that. I had to quickly become a jack of all trades and sometimes wearing so many hats presented challenges.
While it didn’t come easy, hat-wearing eventually became one of my strengths, too, and I’ve since become a real estate investment professional. When I have bought, renovated, and sold houses for profit, my business acumen carried me through. Yet, more recently, I felt I needed to simplify my work life again. I wanted to get back to doing one thing and doing it well. Choosing between flipping houses and being a landlord defined my dilemma. I ultimately decided to focus on rentals because now is a great time for buying income property in New Jersey.
Should You Buy New Jersey Income Property
In the Garden State, there is no shortage of opportunities to buy either buy-and-holds or distressed homes to fix up and sell. In 2018, New Jersey leads the nation in the number of foreclosures so I don’t need to search far and wide for investment properties. Here’s why.
Fifteen years into my career, I found that my most precious commodity was time—the amount I had in between appointments and work weeks to take some nice vacations or attend all of my kids’ athletic or school events. When I began my real estate venture, I started out like a lot of other folks, buying homes and finding quality tenants to occupy those properties. In Bergen County, rents were rising due to residents moving out of the Big Apple and seeking more affordable properties in Weehawken and Jersey City. Cap rates were juicy as rents rose and a number of properties could be had for below market values.
The market continues to look favorable for acquiring rentals within shouting distance from New York City as rising demand fuels higher prices across the Hudson. Thus, finding a rental property for the right price in these neighborhoods hinges on making quick moves when I find a below-market property. Shrinking inventories in Jersey have spawned some bidding wars that I typically avoid but I will pull the trigger on a home if it can be had below my prescribed price threshold.
There should be a welcome residual to the heated Garden State housing market. When I purchase rentals, I envision holding these properties for anywhere from 7-10 years. There have been periods in my investment career when these rules didn’t apply. The financial crisis of 2008 had me a bit panicky and I sold off some of my portfolio to avoid getting trounced. Not that a similar bubble couldn’t pop again but growth forecasts in the state look attractive right now.
In Hudson County, the median list price for single-family homes has grown by double digits– about 10%– year-over-year from July 2017 through July 2018, according to the New Jersey Association of Realtors. Condos and townhouses across that region have witnessed over 20% appreciation in the same time frame. Rental income pays the bills but when I can unload a property for a potentially big gain—the likes of which are shaping up in Northern Jersey—it’s a great bonus.
I love a good deal and buying at the lowest conceivable price isn’t always feasible in a teeming market close to NYC. But, in Camden County– minutes from Philadelphia– one of the highest foreclosure rates in the nation does make finding undervalued properties easy. However, I don’t look to buy auction homes around New Jersey. Instead, I prefer to find houses in the southern locale that are sitting in the pre-foreclosure stage as that’s the best time to reach motivated sellers for rental acquisitions.
Knowing When to Buy that NJ Income Property
Just because the market is ripe for buying rental properties in New Jersey does not mean you should necessarily head out to scoop up every deal that comes your way. As an independently owned and operated HomeVestors® franchisee, I evaluate potential investment properties with the proprietary ValueChek™ software. ValueChek™ provides me with localized repair estimates and area comps so I can feel confident that I am buying at the right price. After all, even if your intent is to rent out the house, you want to make sure you can sell it for reasonable returns, too.
Call HomeVestors today to find out how ValueChek can simplify your life when buying New Jersey income properties, too.
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