One of the top fix and flip and investment real estate markets, New Jersey is ripe for investing into real estate. Whether you are looking for a fix and flip or fix to rent investment loan, multifamily or commercial real estate investment, New Jersey is a great place to invest. New Jersey is one of the most highly charged real estate markets in the nation.
The state is home to 21 counties and 52 cities, the major cities being Trenton, Newark, Jersey City, Peterson, and Elizabeth. Additionally, the state is strategically located for international trade. With over 2800 miles of highway, at least a dozen commuter rail lines, and about 1000 miles of freight line, people and goods can easily move between New Jersey and the rest of North America.
Besides having a world-class infrastructure, the state is also the home to many major industries and corporations. Because of this, there is a continuous stream of new people moving into the state with employment in these companies. With approximately 112 state hospitals and 71 acute care hospitals, New Jersey residents can get great healthcare right in their own backyard.
From the last days of the recession in 2009 through 2019 and continuing on today, the investment real estate markets in New Jersey continues to be on an upward trajectory.
Investment Considerations for New Jersey Real Estate
- States Foreclosure Rate is Surging– New Jersey has the highest rate of foreclosure in the entire United States. The new property tax assessments could continue to drive the property tax rates even higher. The current new assessments will lead to a significant increase in property taxes, particularly in the downtown area of Jersey City and Hoboken. Many residents will be unable to pay the increased taxes. Consequently, real estate investors who are looking to help distressed property owners would get an investment opportunity. This would also help stabilize the besieged neighborhoods.
- Perfect Location for Global Trade – Strategic location, with an unmatched transportation infrastructure, and a highly educated talent pool, the Garden State is primed for international trade. In fact, the state is endowed with five strategically located Foreign Trade Zones, as well as two international airports and ports at either end of the state. These include Port Authority, North America’s third busiest port.
- New Jersey has High Rental Demand– Many people in New Jersey no longer qualify for a mortgage. Many previous, financially incapacitated investors have lost multi-family homes to foreclosures. The market is quite promising for real estate investors who can renovate and convert these homes into rental properties.
- Weather Disasters– February 2018, New Jersey’s job market added 15800 and its unemployment rate fell to 4.6 percent. The new jobs being injected into the market and the economy recovering since the end of recession contribute to the positive sentiments towards real estate.
- Improving Employment Rates– The state of Iowa is prone to floods, many of which have caused agricultural and economic losses worth billions of dollars over the years. Besides direct damage to fields and roadways, floods have a cascading effect that often includes a decrease in property values in the affected areas.
- Low Property Crime Rate– New Jersey has a great reputation for cracking down on crime and upholding the safety of her residents. In fact, the Garden State has the third lowest property crime rate in the United States.
- Top Schools– Anyone who wants their children to get a great education should consider moving to New Jersey. The State boasts top-rated schools. It is also home to 63 colleges and universities, which include the U.S. News and World Reports’ top-ranked Princeton University.
Despite all of these positives, the New Jersey real estate market has some negatives aspects to keep in mind, including:
- High demand and limited supply have pushed property prices beyond where they were at the beginning of 2016. And new developments are still lower than historically normal levels. This keeps upward pressure on prices.
- Foreclosures The overall numbers in the real estate may have improved, but the Garden State continues to be among the front runners in both foreclosures and troubled mortgages. According to academics, foreclosures continue to undermine the state’s real estate market and economy.
- Unforgiving Market for Entry-Level Buyers Besides being subjected to bidding wars, entry-level buyers are also experiencing rising mortgage interest rates.
What are the Best Areas In New Jersey To Invest?
Some of the areas in the Garden state exhibiting the greatest potential for real estate investment opportunities include Jersey City, Hoboken, and Newark.
For example, Forbes has predicted 12% rise in home prices in Jersey City over the next 3 three years.
Besides having an easy access to New York City, the city is also currently experiencing an inflow of new business development, making it attractive to real estate investors on both sides of Hudson River.
While Hoboken New Jersey presents high prices of properties, the city boasts the strongest sales in the Garden State. The demand for real estate in Hoboken remains high, thanks to its access to good schools, the influx of new business, and proximity to the path train with a 1 stop ride to New York City.
In light of these factors, opportunities for purchasing and selling distressed properties in Hoboken promise to deliver a great return on investment. Newark, on the other hand, is currently enjoying the lowest crime rate in 50 years. The city is also experiencing an influx of new business.
What’s more, Newark has direct access into Manhattan. These factors are contributing to an explosion of the population looking to buy property. If you’re looking to buy and hold, Newark could be the ideal place to invest in.
Growth opportunities also exist in the strongest appreciating markets of East Orange, in Essex County; Chatham, a Morris County borough; Rutherford Township in Bergen County; Maplewood, in Essex County; and Strathmere in Cape May County.
If you’re looking for cash flow, the highest yielding markets include Gloucester City, Willingboro, and Roselle, especially for fix and flip investors.
1: Orange, Essex County (ROI: 289.7%)
Originally part of Newark, Orange was incorporated in 1806 and is now home to over 30,000 people. This township is one of four NJ cities and townships that make up “the Oranges.” As with many of the other cities on this list, Orange is a short drive from Manhattan – 26 minutes without traffic, making it popular with commuters to NYC.
TIP> You might mine Airbnb data and notice that a neighborhood’s nightly rates have risen 20 percent in the last six months with a 15 percent increase of five-star reviews. That tells you that people are willing to spend more money to stay in an Airbnb in a specific neighborhood and when they do, they enjoy themselves because they’re leaving positive reviews. These are all leading indicators available before rent growth and new development in a neighborhood even begins. This gives people the opportunity to buy a property in a micro-neighborhood that’s primed for rapid appreciation before the rest of the industry has a clue.
FIX TO FLIP FIX TO RENT MULTI-FAMILY COMMERCIAL FINANCING
2: Irvington, Essex County (ROI: 244.0%)
Named in honor of American writer Washington Irving, this fix and flip hotspot is the 8th most densely populated town in New Jersey and the 17th most densely populated city in America. It is just south of Orange and just as popular with commuters to the city.
3: Sussex, Sussex County (ROI: 234.9%)
Sussex is a quaint town in North Jersey and the only Sussex County locale on this list. It boasts a highly rated modern art gallery, five churches, and proximity to the Wallkill River National Wildlife Refuge.
4: Pennsville, Salem County (ROI: 230.5%)
Pennsville sits on the south-western corner of NJ. The southern portion of the township is occupied by the Supawna Meadows National Wildlife Center which provides visitors with the opportunity to hike, fish, and hunt.
5: Highlands, Monmouth County (ROI: 220.0%)
From this coastal town, residents can get to Manhattan in one hour by car or two hours by ferry as well as enjoy a beautiful view of the NYC skyline. Additionally, the borough lays claim to several highly rated seafood restaurants and the historic Twin Lights.
6: East Orange, Essex County (ROI: 249.0%)
The second and final of “the Oranges” on this list, East Orange is composed of five separate wards and is only a 22 minute drive from Manhattan. The city offers multiple diversions for commuters to enjoy on the weekends, containing five parks and an 18-hole golf course.
7: Highland Lakes, Sussex County (ROI: 205.4%)
Although this community is technically unincorporated, it still made an impressive showing compared to many of NJ’s official cities and towns with a 2017 ROI of over 200%. The area is aptly named with more than six natural and manmade lakes in around six square miles. It is a popular summer location for city dwellers with a country club, nature trails, and log cabins.
8: Westville, Gloucester County (ROI: 202.0%)
The first Southern Jersey location on this list, Westville is located just across the Delaware River from Philadelphia. This family-friendly town has a bustling small business scene with a pub, spa, bakery, and several other local shops and businesses.
9: Gloucester City, Camden County (ROI: 201.7%)
Just north of Westville, Gloucester City is also populated with Philly commuters. Camden is aflood with renters just ripe for investment homes.
10: Pleasantville, Atlantic County (ROI: 200.0%)
Another southern Jersey city to make the list – and the only one not in the Philadelphia metro area. Pleasantville has plenty to offer residents, including a yacht club, little league, and proximity to Atlantic City.
11: Newark, Essex County (ROI: 192.4%)
Newark the largest city in New Jersey, but it is one also of the locations with the highest consistent gross profit potential for fix and flip investors. The city was listed as one of the twenty finalists for Amazon’s second headquarters in April, and potential consumers and homebuyers see the city’s proximity to Manhattan as a huge perk.
- Newark is the largest city in NJ and as a densely populated area it offers a great number of multi-unit properties to invest in. I currently invest in 2-family properties for buy and hold investments. Five-year estimates for 2007-2011 show approximately 20,233 two-unit properties alone in Newark and as new construction development continues that number will rise. [Source: The American Community Survey]
- Newark is seeing an influx of new residents who need housing. According to the 2010 US Census Bureau, 70.7% of Newark residents occupy rental units. That is 195,962 individuals(!) and the population is expected to increase 13.8% by the year 2015.
Residential and Investment Real Estate Loans
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