What’s the verdict on multi family homes as real estate investments in the New Jersey real estate market this year?
New Jersey is the kind of place people go to for a break from the big-city life. The Garden State is mostly made up of suburbs and provides people with a more quiet and affordable lifestyle. For real estate investors, investing in New Jersey real estate could be a hit or a miss without the right guidance. Although it hasn’t recovered as quickly from the recession as other states, New Jersey’s real estate market has got a lot of factors making it attractive to today’s real estate investors. However, this blog isn’t talking about just any type of property; it’s talking about multi family properties. Are these good investment properties in New Jersey? Is this the right investment decision in 2018? Let’s find out.
Multi Family Homes
Most successful real estate investors know how important diversifying your real estate investment portfolio is. That’s the beauty of real estate investing; there’s more than one rental strategy to follow. Growing your portfolio through different types of real estate investments is what builds wealth. That is if you make the right investment decisions. The options don’t just end at commercial and residential properties; there are so many other branches in real estate investing.
When it comes to residential properties, the two main types of properties you can invest in are single family homes and multi family homes. Investing in rental properties is one of the best ways to start earning a profit and growing your capital. Those of you choosing multi family homes as an investment could be making the best real estate investments of your career.
What Is a Multi Family Home?
Multi family properties are buildings with more than one rentable space. They have multiple rental units in the same building. The most commonly known type of multi family property is the apartment complex. The rental units of multi family homes can be rented out on either a short term basis or long term basis. Short term rentals are usually referred to as vacation rentals because of the tenant’s short period of occupancy (usually a couple of days). Long term rentals are the traditional rentals in which the tenant takes on long-term occupancy, typically renting out the unit for months or years.
Because of their ability to hold a larger capacity of tenants than single family homes, multi family homes are viewed as the more efficient way to grow your investment portfolio. There are many advantages to investing in multi family homes. These include access to easier and better financing opportunities, the ability to quickly grow your rental property portfolio and the luxury of hiring a property manager (because it makes more financial sense).
What About Multi Family Homes in New Jersey?
A smart investment decision comes about when you realize a good return on investment (ROI). You invest your money in hopes of realizing a profit and making more than what you started with. Is investing in multi family homes in New Jersey a smart investment decision? Can you be making money in real estate by making these investments? That depends. It depends on New Jersey’s current real estate market trends and market conditions. It depends on the quality of resources you have- the quality of data.
Related: The Ins and Outs of a Multi-Family Investment Property
Mashvisor is all about data. Quick, reliable, and accurate real estate analytics present at the click of a button. Mashvisor shows you how easy it is to conduct a real estate market analysis to find the property valuation of any of your real estate investments. Not only do we analyze specific investment properties, we also provide insight and data on neighborhoods for cities nationwide. That’s how we’re going to let you know if investing in multi family homes in New Jersey is a smart decision or not. The numbers speak for themselves.
New Jersey Real Estate Market- Multi Family Homes
With the help of Mashvisor’s investment property calculator, we’re able to show you the performance of multi family properties in the cities and neighborhoods of New Jersey.
Related: How Can You Find the Best Multi Family Homes for Sale to Invest in?
Jersey City, NJ
- Median Property Price: $662,820
- Monthly Traditional Rental Income: $2,154
- Traditional Cap Rate: 0.89%
- Traditional Cash on Cash Return: 0.89%
Top-Performing Neighborhood in Jersey City: West Side
- Median Property Price: $423,496
- Monthly Traditional Rental Income: $1,986
- Traditional Cap Rate: 1.47%
- Traditional Cash on Cash Return: 1.47%
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The West Side neighborhood isn’t only the best neighborhood in Jersey City; it’s also one of the best out of the cities we’re going to be mentioning. According to our data, multi family homes seem to be performing best in West Side-Jersey City, so consider starting your search for multi family homes for sale here.
Irvington, NJ
- Median Property Price: $228,134
- Monthly Traditional Rental Income: $1,455
- Traditional Cap Rate: 1.45%%
- Traditional Cash on Cash Return: 1.45%
Northside-Paterson, NJ
- Median Property Price: $179,000
- Monthly Traditional Rental Income: $1,400
- Traditional Cap Rate: 1.07%
- Traditional Cash on Cash Return: 1.07%
This neighborhood in Paterson has the lowest median property price out of all the other neighborhoods in New Jersey according to our data.
Note: To find and get data on specific multi family properties in New Jersey, sign up to use our property finder tool.
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Should You Invest in Multi Family Homes in New Jersey in 2018?
New Jersey can be the best for multi family homes right now if you know exactly where to invest in real estate here. The real estate market has still got some time before it starts showing major signs of recovery from the recession. It’s also important to mention the state’s tax situation. New Jersey has the highest property taxes of any state, which might send most real estate investors running. There is a bright side, however. Because property taxes are so high, personal property ownership rates will decrease. As a result, investors can purchase homes cheaply and find tons of tenants who will reliably rent for years.
Related: 6 Questions to Ask Yourself Before Buying Multi Family Homes for Investment
You can definitely still find a profitable investment in the New Jersey real estate market if you use the right resources to help you. Don’t forget to utilize our tools. Do you have questions about Mashvisor? Click here to read our FAQs and learn about our tools.