Studio in Jersey City, NJ

[David Malott]

Investment Info:

Condo buy & hold investment.

Purchase price: $242,500
Cash invested: $50,000

A standout in my investment portfolio, this Jersey City studio is in a prime location with a top-class HOA and great building maintenance. The property consistently attracted quality tenants due to its excellent location and the scarcity of studios in the area and was never vacant for more than half a month. I've had my share of real estate misses, but this proved out an investment thesis to focus on smaller properties in well-managed buildings in great neighborhoods.

What was the outcome?

Location & Demand: Prime neighborhood with high tenant demand, no more than 2 weeks vacancy over 10 years.
Strategic Positioning: Rented/sold at market's lower end with a 8-10% annual cap rate.
Financial Success: Listed at $400,000, aiming for 5x on original investment of $50,000, post-mortgage.

Lessons learned? Challenges?

Lessons learned: it's about buying up investment properties in well maintained buildings governed by HOAs who are willing to invest prudently in their property. The HOA never spent money on frivolous amenities, but spent it where it counts: keeping the building in excellent working condition. The only way to know a good HOA from a bad is to actually go around and knock on neighbors doors. Introduce yourself and get a feel for the quality of other residents and their impression of the building.