Investment properties are real estate properties that can be bought with the intention of making a return on the investment (ROI), either through residential income and commercial leasing or through the future resale (speculation). We have organized the listed properties for Sale in North Jersey by their respective categories.
Buying Investment Property in New Jersey:
New Jersey offers real estate investors a diverse market full of attractive investments at nearly every price point. New Jersey is unique in that it offers easy access to several major cities. A resident could choose to live in the center of the state and easily commute to either New York City or Philadelphia. Moreover, residents live close to the Atlantic Ocean and all that the shoreline offers. Property values can vary significantly throughout the state allowing investors to find potential investments in their desired price range. This gives investors opportunities to buy affordable properties, add value, hold, and eventually make a nice profit.
Why use a real estate agent to find investments?
As agents for real estate investors, we find properties to fit your investment strategy. A strategy that is dependent on your individual situation. A few factors when putting together a strategy may be available income, credit worthiness, investment timeframe, and tolerance to managing a real estate portfolio. There are properties to fit any investment strategy.
One of the biggest challenges of investing (flipping property or buying rental properties) is finding deals. Using a real estate app or software can provide some insight, however this is where real estate agents have a distinct advantage with the MLS (multiple listing service). Popular real estate software or websites designed for investors usually source limited (sometimes old) information from 3rd party data services. While the MLS may also uses 3rd party data (minimal), they have an extensive private database of information that is ONLY available to licensed real estate professionals.
A licensed real estate professional can provide you with more deal options, plus the MLS data can be extremely valuable for negotiating price and avoiding potential pitfalls.
Residential
The best deals are usually homes that only need cosmetic repairs, or homes with motivated sellers. Types of homes that make for good flips in and often include: foreclosures, pre-forecloses, short-sales, and abandoned or neglected properties.
Two family Home or Three family House
A two or three-family house, usually of frame construction, in which all apartment units are stacked on top of one another or nest to each other. .
Multi-family Residential
A classification of housing where multiple separate housing units of residential occupants are contained within one building. Units can be next to each other (side-by-side units) or stacked on top of each other.(Buildings with more than four units are typically considered commercial properties.)
The rules for financing depend on whether the owner will live there or not: If you don’t plan to live in the property, you’re considered an investor. You may be able to use the projected rental income from the property to help you qualify for a mortgage, and you may also qualify for a higher loan amount.
If you live in one of the units, you have more control over property value and repairs. You can catch problems quickly and do damage control when issues do arise. While the loan amount may be lower on an owner occupied, the down payment could be lower too, and you could qualify for different incentive programs.
Various tax benefits come with owning a multifamily unit. You can write off most of the repairs and depreciate the asset over time. Potential investors should ensure that this type of property fits their budget and needs.
Commercial
Commercial properties are generally more affordable than in some of New Jersey’s other real estate markets. Jersey City offers a strong and diverse local economy, it has been nicknamed “Wall Street West.” And there is consistent demand for both industrial and commercial office space. Newark has also been a consistently strong market.
Mixed Use Building
A building with space for both commercial, business, or office use, and space for residential use. Possible arrangements include the commercial/business use on the first or first couple floors and one or more apartments or residential spaces on the upper floors. Another possibility is to have the commercial/business area up front and the residential area in the back. Some or maybe all of the space may be used by the owner or some or all the business and residential units may be leased by the owner.
Apartment Buildings
An apartment building or buildings on adjoining pieces of land, generally owned by one entity. The buildings often share common grounds and amenities, such as pools, parking areas, and a community clubhouse, used as leasing offices for the community.
Farm Land (Agricultural)
Rentals
Real estate experts agree that location is one of the most important factors for the success of rental properties in the NJ area. Location not only determines vacancy rates, but also the possible income and expenses that determine the return on investment (ROI).
About location, New Jersey has the strategic location of being right next to New York City and Philadelphia makeing it a great place for buying a traditional investment property. The beaches and other attractions, make New Jersey a top destination for short-term rentals too. The location of the property will be one of the biggest factors influencing how easy it is to find tenants. It also determines what you’re able to charge for rent. The return-on-investment metric used here is the capitalization rate, or cap rate.
However, before you decide to rent out your property on Airbnb or another similar platform, make sure you study the local legislation carefully in terms of short-term apartment or housing rentals restrictions and bans.
The Capitalization Rate
Cap rate is one of the most popular metrics for measuring the return on investment (ROI) of rental properties. It is achieved by dividing the net operating income (NOI) of the investment property by its current market value. A good cap rate used to be above 8% or even above 12%. However, investors should know that the New Jersey rental business has become so competitive that anything above 3-4% is “considered” a decent return.
Jeffrey Posner is a premier real estate professional in the state of New Jersey. His team of real estate associates know the state inside and out and offer a broad range of services to real estate investors. Learn more about the process, discuss a potential deal, contact me today.
