When I tell people that I’ve been buying rental properties in Bridgewater, NJ, they are kind of surprised. “Isn’t Bridgewater the quintessential bedroom community?” They ask. “Aren’t a bunch of people buying homes and settling down there for at least 30 years?” “Is it even a good market?”
I understand their shock. For years, Bridgewater was a place for people to buy when they no longer wanted to live in New York. And, historically, its rental market was never that great.
That’s changed. It still is ideal for its proximity to New York, but the rental market has improved. More people are renting instead of buying. They’re wanting to get out of the city but without having to put down roots.
So, if you’re looking for an investment property, buying a rental in Bridgewater, NJ could be a worthwhile decision.
Why Invest in Rental Properties?
When you invest in rental properties, you become a landlord. And if you’re asking yourself if being a landlord is worth it, the short answer is: sometimes. It can depend on a lot of things, such as the average rental price in the area, the cost to buy a property, the amount of upkeep you’ll have to do, and, of course, your ability to manage tenants.
Let’s break that down.
The biggest numbers involved in buying a rental are:
- the cost of the property and the amount you have to pay to fix it up
- the amount you have to pay every year in upkeep and bills
- the amount of rent you will receive annually
Balancing the latter two figures against the overall cost determined within the first two is called the capitalization rate (or cap rate). Calculating the cap rate is important to determine if a rental property is a good investment. But, it isn’t foolproof.
The factors that influence the cost of a rental are different, even on the same block. Things like the neighborhood, walkability, and the condition of the house can cause your investment costs to fluctuate. You must decide how much you should charge in rent to cover these costs and render a decent ROI through passive income.
Understanding Rental Properties in Bridgewater NJ
The factors mentioned above are why I think buying rental properties in Bridgewater, NJ is potentially a good idea. While many people think that Bridgewater is entirely comprised of homeowners, they’re likely thinking of the township before the ’80s and ’90s. That’s when everything started to change and when renting became more popular.
Right now, the rental rate on properties is at almost 20%. As prices in New York continued to skyrocket, people who worked in the city wanted to live elsewhere. This is true even for people who are still renting.
Not only that, since the pandemic, even more people have moved out of the city. And it hasn’t just been a matter of getting away for a bit, it’s been about finding a new place to live while still being in close proximity to work. Bridgewater is one of the reasons why investing in NJ during the height of COVID was a smart move.
Bridgewater, in particular, has boomed, and the rental rates have reflected that. The median monthly rental rate (as of April 2021) was $1,659. That’s higher than New Jersey’s already above-average rate of about $1,300.
What To Look For in Bridgewater NJ Rental Properties
Bridgewater definitely looks promising, but there is no such thing as a universally good rental market. There are areas that may be better for buying a rental property than others in the township.
Here’s what you should look for before buying a rental in Bridgewater:
- Leads on cheap houses
- Knowledge of up-and-coming neighborhoods
- Houses that can be turned around and rented quickly
In Bridgewater, it can be fairly easy to find cheap houses in the area. But these aren’t always the ones people want to rent—especially those who are accustomed to New York comforts. That’s why taking a tour around the neighborhood is always a good idea before investing.
Some of the neighborhoods that have been appealing to renters as of late include:
- Bradley Gardens: Southwest portion; it’s an older residential area and peaceful
- Green Knoll: the heart of the restaurant/bar scene; similar to living in a big city without living in one
- Thomae Park: ideal for families
You should also look beyond the up-and-coming areas. You may be able to find less expensive houses to generate a greater ROI.
Considering Buying a Rental in Bridgewater, NJ? Here’s the Best Way
A trending rental market is great when you’re buying investments. However, that same popularity can make it hard to get quality leads without dealing with excessive competition.
When I became an independently owned and operated HomeVestors® franchisee, I learned that dealing with competition and getting leads is easier when you’re able to associate with a network of experienced real estate investors.
As the owner of a HomeVestors® franchise, I get the benefits of their nationwide marketing reach, such as the We Buy Ugly Houses® campaign that almost everyone in Bridgewater knows. When a motivated seller is ready, they call HomeVestors and I can get the lead. All I have to do is make sure the property fits into my investment goals. Luckily, HomeVestors also has proprietary valuation tools which help me make that call.
Bridgewater isn’t the market it used to be. But it’s still a place where people want to live. If you’re looking to invest, buying a rental in Bridgewater could work out for you too.
If you’re considering buying rental property in Bridgewater, NJ, request information about becoming a franchisee today.
Each franchise office is independently owned and operated.