Investing in Newark, NJ

[Phil B.]

Curious to know where people are investing in Newark, NJ? Is rent control an issue? What kind of returns are you seeing for buy and hold? 

[Moises Mari]

Hi @Phil B., 

There are many many posts that address this question here at Biggerpockets. You will hear a little bit of both sides, investing in Newark is rewarding, as well as, it's not as profitable in the long run due to rent control laws among other things.  It really depends on your investment appetite. 

I personally own property in Newark, and I find it profitable, but yes, you must get familiar with the rent control laws, because they are very tenant friendly laws as most landlord/tenant laws in NJ. Returns in NJ Newark can reach 12 - 18% cash on cash return assuming you are using a normal conventional loan putting 25% down payment and including approx 7-10k of closing costs. This would include accruing approx 15% from gross rents for Capital expenditures and repairs/vacancies. This 15% total may be on the lower end, however, I haven't encounter much vacancies in this part of NJ.  There are definitely others ways to finance and perhaps get better returns, however, as I mentioned, this is assuming you would be using a regular conventional loan with 25% down payment.

All real estate investments are on a case by case basis, make sure you run your numbers well, you must perform your due diligence on whatever investment property you purchase, as these numbers may apply to some but not all properties in Newark, NJ - Essex County.  Best of luck in your investment properties endeavours!