Anyone doing short term rentals in Hudson County, New Jersey?

[Stephen Beckwith]

I’m an inexperienced real estate investor living in Texas, and I’ve come across an opportunity for a very unique home in Jersey City, that I think could be a good short term vacation rental. It is steps from Hoboken and a short train or bus ride into Manhattan. But I don’t know much about the vacation rental market in the area. It’s a 3 br home with a detached garage that (with a lot of work) could potentially be converted into extra living space. It has parking for two cars, which is extremely rare in the area. I haven’t worked out all the numbers, but I would likely need to clear 6-7k monthly to make it worth it. I know there are some weird tax laws in Jersey regarding vacation rentals. Has anyone been doing vacation rentals with success in this area? If so, any advice? TIA!

[Mark Miles]

Originally posted by @Stephen Beckwith:

I’m an inexperienced real estate investor living in Texas, and I’ve come across an opportunity for a very unique home in Jersey City, that I think could be a good short term vacation rental. It is steps from Hoboken and a short train or bus ride into Manhattan. But I don’t know much about the vacation rental market in the area. It’s a 3 br home with a detached garage that (with a lot of work) could potentially be converted into extra living space. It has parking for two cars, which is extremely rare in the area. I haven’t worked out all the numbers, but I would likely need to clear 6-7k monthly to make it worth it. I know there are some weird tax laws in Jersey regarding vacation rentals. Has anyone been doing vacation rentals with success in this area? If so, any advice? TIA!

  I think they recently outlawed short term rentals in that area. Besides, you’re in the south, take advantage of that and buy up some great vacation rentals in the south, that’s where all the big money is made!

I tend to buy in the Southern half of the US for 3 reasons:

1) you get much higher year-round occupancy rates in the South & it's simply tough to earn a good ROI in the North if your place sits vacant for a big chunk of the year

2) Culturally, the Southern half of the US seems to be a lot more accepting of STRs regulation-wise. A lot of these southern beach & mountain towns have been supporting STR for 75+ years, long before Airbnb was a thing, so they're very comfortable with it and it's a built-in part of the community.

3) The Southern half of the US is more forgiving if your property is out of service for a couple months (a flood, property damage, coronavirus) bc you earn year-round revenue. People in the north can get really screwed if, for example, their property is out of service during the peak summer season when they would typically earn all of their revenue

A lot of Northern places are FREAKING OUT over STRs & STR regulations & they don’t seem to be very supportive of it. So, in the North, best case you’re fighting an uphill battle with a lot of uncertainty. Worst case, it gets outlawed in a town AFTER you’ve bought a place there & now you have to sell at a HUGE loss bc there’s no buyer demand once STR use is banned! I’ve seen it happen...

Anyway, here’s a great summary, courtesy of Avery Carl, of the kind of numbers you can expect down south (including complete pro formas). You simply won’t get annual revenue, annual occupancy rates, annual net income, & annual ROI like this in the north:

https://theshorttermshop.com/c...

“Wise Northerners invest in the South” -Mark Miles