Are buy/hold rental income plays viable in NJ markets?

[Michael Martorella]

I’m a new investor looking into the Newark/Kearny market and I’m seeing low cap rates and low cash on cash returns compared to other markets in the NE region (e.g. Lehigh Valley area). It doesn’t seem like buy/hold for rental income is a viable strategy in NJ markets. Is this the case?

I understand every market is different and am wondering what other strategies are used in higher COL and hotter areas.  What are the metrics for which you’re optimizing?

Or if you have found success with buy and hold for rental income, how are you modeling these deals and when do you start seeing positive CoCROI?

[Brett Baginski]

Hi @Michael Martorella.  I think it really depends where you are looking in NJ.  I was not able to find anything in Monmouth County that worked for me, mostly due to the capital needed to enter into that market, but I went further south to Ocean County and the numbers work a lot better for me there.  If you have any questions into the numbers just send me a direct message and I'd be happy to share my experience.