A friend of mine wants to dip her toe into the real estate investment field, and recently came to me asking for advice about income properties. She eventually wants to quit her day job and focus on real estate full-time, but she’s nervous about losing her consistent paycheck. She figured buying a home and renting it out would be a great way to bring in steady money and ease her way into a full-time real estate investing business.
She’s not wrong. New Jersey is a great place to be a landlord—36% of our population is made up of renters, which is higher than the national average. That means the demand for rental properties is high, so she shouldn’t have to worry about finding tenants. Her real problem was that she didn’t have a plan for how to find an income property for sale in NJ, and wasn’t sure where to start. So, I told her all about the most common ways investors look for income property for sale in NJ, before letting her in on my secret method.
Where to Look for Income Property for Sale in NJ
If you’re also considering an income property as a way to make money on the side or start your own real estate investment business, you’ll need to look for affordable homes that can be quickly repaired and rented out as soon as possible. That’s much easier said than done, though. Here are a few common ways investors look for income property for sale in NJ.
Foreclosure Auctions and Sheriff Sales
One place to look for cheap NJ properties is at foreclosure auctions. Prices on foreclosure homes are often a fraction of the market value, which means you could potentially earn a much higher ROI. You can check the sheriff’s website for individual counties to learn more about upcoming foreclosure auctions—for example, the Bergen County Sheriff’s Office provides details about how to bid, what to do if you win, and where to see details about the properties for sale.
Buying a property at a foreclosure auction is always risky, though. Often, these homes have been neglected or left vacant for years, which means they may be in very bad shape. Inspections are rarely allowed before bidding on a foreclosure home at an NJ auction, so you may not know what condition the property is in until after you’re on the hook. In many counties, you must pay a non-refundable deposit of 20% before you can even bid on a property, so if you decide to back out of the deal after learning more about the condition of the home, you could lose a substantial amount of money.
So, foreclosure auctions and sheriff sales may be one way to find cheap income property for sale in NJ, but the risks often aren’t worth the rewards.
Pounding the Pavement
Another tried-and-true way to find income property is by pounding the pavement—walking (or driving) around looking for homes with potential. When I was looking for my first income property, I would take a 10-minute detour on my morning commute once a week to cruise through a desirable neighborhood and make note of any properties that seemed neglected or old compared to others on the same street. Then on the weekend I’d knock on those doors and hand out business cards, offering to buy their homes quickly and with cash. I figured at least some of these homeowners were likely struggling with payments and upkeep on their homes and would jump at the chance to offload the property without needing to hire an agent or go through the foreclosure process.
In theory, I may have been correct, but in practice, most homeowners were offended by my approach. Looking back, I understand why—I was arriving unannounced at their door, trying to stick my nose in their financial business at what may have been a difficult time for them. Not everyone slammed the door on me, and I eventually made a deal, but only after doing this every week for over a year.
Pounding the pavement is very time-consuming and doesn’t consistently generate leads, so I recommend making it a very small part of your strategy for finding income property for sale in NJ.
By far the quickest and easiest way to search properties for sale is on listing websites. From national listing sites like Zillow and Redfin to the New Jersey Multiple Listing Service (NJMLS), pretty much every listed home for sale is going to be online somewhere. Listing websites allow you to apply filters to narrow your search to specific neighborhoods, price ranges, and property types, which means it should be easy to find the perfect income property. However, this doesn’t mean you should rely on listing websites as your only source of income properties for sale.
There are two major problems with focusing all your efforts online. First, everyone uses these websites, which means your competition for the best deals is going to be fierce. Second, listed properties are often much more expensive than off-market homes. Listing websites make it so easy for sellers and real estate agents to compare home prices and ensure they’re getting the best offers, which means you’re less likely to find hidden gems. And again, when an underpriced home does show up on a website, there will be so much competition that it’s likely to drive the bidding price up.
So, while listing websites are a great way to conduct neighborhood and market research, you’re much less likely to find a great deal on an income property.
The Easier Way to Find Income Property for Sale in NJ
After explaining the pros and cons of these real estate lead generation methods to my friend, I let her in on a little secret. I didn’t see any success with my income properties until I joined the HomeVestors® real estate investing franchise network. After becoming an independently owned and operated HomeVestors franchisee, I never had to pound the pavement or attend a sheriff’s sale again.
As a franchisee, I’m backed by the national We Buy Ugly Houses® marketing campaign, featured on billboards, TV, and the internet. That means motivated homeowners come to me, allowing me to purchase great deals on income properties before they go to auction. Now that my friend is a franchisee too, she also receives the expert guidance and mentorship of a HomeVestors Development Agent to help her through her first few deals.
The best way to find income property for sale in NJ is to have the leads come to you. Contact HomeVestors® today to learn more.
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