New Jersey isn’t just a fantastic place to live. It’s also a perfect place to invest in real estate. Although this competitive market can be unforgiving for beginners, experienced investors and those willing to partner with firms that can help will find that it’s worth the extra effort. Read on to find out what sets this state apart.
High Rental Demand
One of the things that makes New Jersey perfect for real estate investment is that the state is known for its high rental demand. That’s true whether investors are looking for foreclosed properties that can be turned into multi-family homes or luxury apartments.
Investing in a rental property gives property owners both monthly income and equity, making it a more cost-efficient strategy than house flipping and buying commercial properties. Those who want to maximize their return on investment (ROI) should consider putting their money into the luxury market. There are real estate firms that specialize in this form of investment, making it easier to get started.
The Garden State is in a prime location for international trade, which means its economy can be expected to continue growing in the coming years. The state has five Foreign Trade Zones, two international airports, and two shipping ports. It’s also home to the Port Authority, which is the third-busiest shipping destination in North America.
Because New Jersey has become a hub for international trade, it has unmatched transportation infrastructure and an educated talent pool. The state has also been drawing in new high-paid industry experts in recent years. Those new transplants need someplace to live, which provides an excellent opportunity for rental property investors and developers.
High Foreclosure Rates
Not interested in holding rental properties? New Jersey is also a great state for flipping houses since it currently has one of the highest foreclosure rates in the country. The state’s recent reevaluation of property taxes could wind up driving foreclosure rates even higher in the future.
High foreclosure rates are bad news for current homeowners, of course, but they’re a good thing for investors. There’s no need to feel bad about buying foreclosed homes, either. With residents unable to pay property taxes, buying up properties from distressed property owners can also help to stabilize affected neighborhoods.
Quality of Life
New Jersey ranks high on the quality of life index, which helps the state continue to draw in new residents. The Garden State has the third-lowest rate of property crimes in the U.S. and boasts many of the country’s top-performing schools. Employment opportunities abound and the state is known for both its bustling cities and beautiful beachfront towns. This makes it easier for new residents to find cities or towns that perfectly match their expectations.
Wondering why quality of life should matter to real estate investors? Even those who don’t plan on moving to the Garden State themselves will benefit from New Jersey’s high quality of life when it comes to finding good tenants and ensuring that rental properties don’t wind up sitting vacant. Those who prefer to flip houses will also find that it’s easy to put in the work to fix up a property then make good money on reselling it to a buyer attracted by everything New Jersey has to offer.
Plenty of Options
The fact that New Jersey boasts very diverse communities means investors will have their pick when it comes to strategy. Those who want to invest in commercial or industrial properties will benefit from the state’s strategic location for international trade, while rental property owners will have no trouble finding homes that fit their needs.
High-income renters often look to North Jersey for properties, which means the cities closest to New York are rife with opportunity for luxury real estate investment. Families may prefer to rent stand-alone houses or units in multi-family homes farther from the border. It’s easy to find everything from single-family houses to large apartment complexes in New Jersey, which means no matter what strategy they choose to employ, residential real estate investors will be able to find properties that offer a good fit.
Reasonable Mortgage Rates
In 2020, mortgage rates in New Jersey fell to their lowest point ever. That’s good news for investors who need to finance their purchases. Mortgage rates in the Garden State are, as a rule, quite variable, though. That means it’s best to get started now while the time is right.
Experts Are Forecasting a Housing Shortage
With more people moving to New Jersey every year, some experts are anticipating a housing shortage. That can be problematic for buyers who want to purchase single-family homes for personal use, but it can also be a boon to rental property owners. Potential buyers entering the market during a housing shortage and working on strict budgets will be much more likely to rent units and try to wait out the market fluctuations. Those who can afford to invest in residential real estate now will be able to profit from their decisions.
Now is also a good time to invest in distressed properties in New Jersey, for many of the same reasons. With demand high, future buyers will be more likely to express interest in the existing housing stock. Purchasing distressed properties and renovating them for future sale when the housing shortage hits is a riskier strategy than investing in rental properties, but it’s one that could provide a decent short-term payoff for the right investors.
The Bottom Line
New Jersey is known for its beautiful beaches, bustling cities, and strategic location for international trade. The state boasts fantastic schools, including Princeton, low crime rates, and high quality of living. It should come as no surprise that newcomers are moving to New Jersey.
There’s no need to move to the Garden State to take advantage of what is set up to be a perfect situation for those with the working capital to invest now. Investors can work with local real estate firms to ensure that their money is being invested wisely. North Jersey is showing a ton of promise right now, so don’t wait until the market has already turned to get in on a great opportunity.