New Jersey is a great place for investing in rentals. Learn how to find rental properties for sale in New Jersey to begin your investing journey.
Table of Contents
- Is New Jersey a Great Place to Invest in Rental Properties in 2022/2023?
- 5 Things to Consider When Finding Rental Properties for Sale in New Jersey
- 10 Best Cities in New Jersey for Traditional and Airbnb Rental Investment
- Find Rental Properties for Sale in New Jersey Through Mashvisor
Investing in rental properties can be lucrative, especially if you know where to invest. When choosing a good location for rentals, it’s important to consider several factors that will boost your chances of success. For instance, you must ensure that the location has a strong economy and a growing population. Also, consider the job opportunities available in the area.
The tourism industry is also something that you should look at, even if you’re planning to invest in traditional rentals. Further, you should check the home appreciation rates to know how soon you can expect your property to increase in value. When it comes to investing in rental properties, New Jersey is one of the top choices because of its strategic location.
To find the best rental properties for sale in New Jersey, you should determine the specific neighborhoods that are likely to generate the most profitable income. You can use a real estate analytics platform to get this important information. Most new and seasoned investors work with Mashvisor because of the platform’s comprehensive and useful real estate data and analysis.
In this article, you will learn:
- Why New Jersey is a great place for rental property investments
- How to find the best investment properties for sale in New Jersey
- How Mashvisor can help you become successful in your New Jersey real estate investing
Is New Jersey a Great Place to Invest in Rental Properties in 2022/2023?
New Jersey is strategically located next to New York City and Philadelphia, which is why it is one of the best places for buying a traditional rental property. Investors who are in search of high rental demand know that buying rental properties for sale in New Jersey is a good idea. In addition, New Jersey is also a top destination for Airbnb rentals because of its thriving tourism industry.
According to Mashvisor’s data, as of August 2022, New Jersey continues to be a seller’s market.
- Median Property Price: $613,668
- Average Price per Square Foot: $1,630
- Days on Market: 80
- Number of Traditional Listings: 34,626
- Monthly Traditional Rental Income: $2,274
- Traditional Cash on Cash Return: 1.82%
- Traditional Cap Rate: 1.86%
- Price to Rent Ratio: 22
- Monthly Airbnb Rental Income: $3,596
- Airbnb Cash on Cash Return: 3.16%
- Airbnb Cap Rate: 3.23%
- Airbnb Daily Rate: $215
- Airbnb Occupancy Rate: 56%
- Walk Score: 48
While New Jersey remains one of the most expensive states for investing in real estate, it is also one of the states with the highest appreciation rates. Home values in New Jersey are expected to continue to rise in 2023 and beyond. It is why New Jersey is a desirable state if your goal is to see your property increase in value in just a short period of time.
Related: How to Calculate Real Estate Appreciation
Why New Jersey Is Good for Traditional Rental Investment
As per Mashvisor’s August real estate data, the price-to-rent ratio in New Jersey remains high at 22. A high price-to-rent ratio means that residents find it more reasonable to rent a home instead of buying one. It may be due to high selling prices and a low supply of properties. A place with a high price-to-rent ratio offers a great opportunity for investing in traditional rentals.
Even though the median home value in New Jersey is a bit high state-wide, there are plenty of profitable cities and neighborhoods where you can find properties under $400,000. In fact, even new investors with a low budget can still find good opportunities in New Jersey. You just need to know where to look and what to look for.
If you decide to invest in New Jersey traditional rentals, you can expect to earn an average income of $2,274 monthly. Keep in mind that, in general, the US economy may not look so good amid the various crises that we are currently facing globally. Despite the prevailing economic uncertainties, the New Jersey rental market still offers profitable opportunities for investors.
Another good reason New Jersey is a good place for investing in traditional rentals is that the state’s labor market has significantly improved since 2021. In fact, job recovery in New Jersey has accelerated, with 90% of the jobs regained from pre-pandemic levels. A place with many job opportunities attracts new residents, improving population growth.
Why New Jersey is Good for Airbnb Rental Investment
Aside from its stable job growth, another driver of the New Jersey real estate market is its thriving tourism industry. It is home to several natural attractions, including beaches, which make New Jersey a great place for investing in Airbnb rentals. And because of its strategic location, the state can be an excellent place for stopovers for New York and Philadelphia visitors.
New Jersey attracts many visitors with different tastes and preferences. You can find approximately 130 miles of diverse coastline, making it a favorite destination among beachgoers and lovers of water activities. It also boasts a rich history and culture, various scenic attractions, and a great place for arts, music, and entertainment.
Another great thing about New Jersey is that it is a place that’s worth visiting no matter what the season. Tourists and locals alike can enjoy the beaches during the summer, do some outdoor activities during spring, and bask in the picturesque autumn scenery. Also, New Jersey is a true winter wonderland, making it a perfect destination during the cold season.
According to Mashvisor’s August 2022 data, Airbnb investors in New Jersey can earn an average of $3,596 monthly rental income, with a daily rate of $215. Plus, with around 3.16% cash on cash return, New Jersey is definitely an excellent location for short-term rentals. The Airbnb occupancy rate is around 56%, which may also vary depending on the season.
5 Things to Consider When Finding Rental Properties for Sale in New Jersey
Before you start looking for investment properties for sale in New Jersey, you should understand that the state covers a substantially wide geographical area. Keep in mind that not all cities and neighborhoods in New Jersey are optimal for rental property investments. So, it’s crucial to know where exactly you can buy a profitable income property depending on your preferred strategy.
To help you find the best rental properties for sale in New Jersey, you need to consider the following important factors:
1. Neighboring Amenities and Businesses
If you plan to invest in traditional rentals, you need to consider the neighboring businesses in your chosen location. A good traditional rental location should be near basic amenities that families and working residents need. For instance, you need to consider the available schools near the neighborhood, as well as medical and banking facilities.
If you target working individuals, it’s best to choose a location that’s near where the job opportunities are. State-wide, New Jersey’s Walk Score is 49, which means that some areas may be walkable, and some are not. If you invest in a neighborhood that is quite near (and perhaps walkable) to where people work, you can attract more potential tenants.
Related: Invest in the Most Walkable Cities in the US That Are Affordable
2. Accessibility
One of the reasons why buying a New Jersey property for sale is a good idea is that NJ offers easy access to other major cities. Several areas at the center of the state allow easy commuting to either Philadelphia or New York City. If you want to target renters who travel to the neighboring states frequently, planning your rental location is a must.
In addition, the state is close to the Atlantic Ocean and a golden stretch of New Jersey shoreline. Because of this, investing in New Jersey real estate is ideal for both traditional and Airbnb rental investors. If you plan to invest in vacation rentals for sale, choosing a location near the coast is also a good idea.
3. Market Diversity
Although New Jersey is generally considered one of the most expensive states in the US, there are certain areas in NJ that offer affordable housing. In fact, New Jersey home values can vary significantly across the state, depending on which city you’re investing in. It allows investors to find the right income property within their budget and desired price range.
When choosing a location, it’s essential to check the real estate market data and rental analysis specific to the neighborhood. It lets you know if the area is ideal for your investment strategy. Working with Mashvisor can provide you access to up-to-date real estate data and comprehensive analytics that can help you make an informed investment decision.
Mashvisor provides information such as the cap rate, cash on cash return, occupancy rate, and average rental income of a potential investment property. You also get to access neighborhood analysis and rental comps to know whether or not a particular property is worth investing in.
In addition, you can use Mashvisor’s rental investment calculator to see how much you can earn from a particular rental property. The calculator allows you to customize your expenses, as well as your financing options, so that you can estimate your potential income. By using the rental calculator, you’ll be able to determine if an investment will be profitable.
4. Steady Job Growth
Another driving factor of a booming real estate market is its job growth. When a place offers a lot of employment opportunities, you can expect people to stay.
New residents are also likely to come and live in the city, keeping the population growing at a steady pace. When the population grows, so will the demand for housing and rentals.
With almost 90% of the jobs regained, we can expect to see improvement in New Jersey’s economic conditions. It is also another reason the New Jersey real estate market remains hot this year, and the trend is expected to continue in 2023 and beyond. With the current median price of $613,668, your real property will definitely increase in value in no time.
5. High Demand for Rentals
With all the advantages of owning a home in New Jersey, there is no doubt that the demand for properties for sale in the state keeps rising each year. However, with low inventory, not everyone who wants to buy a home in New Jersey can find a property that fits their budget. With this, the demand for rentals continues to soar.
In fact, the current price-to-rent ratio in New Jersey is high at 22. It means that residents would rather rent a home than buy one, increasing the demand for rental properties.
If you want to take advantage of this high demand, it’s best to start looking for rental properties for sale in New Jersey before all the good ones get sold out.
Related: What Price to Rent Ratio by City Should Investors Expect in the US Housing Market 2022?
Owning a home in New Jersey offers several advantages, which help increase the demand for rental properties for sale in the state.
10 Best Cities in New Jersey for Traditional and Airbnb Rental Investment
As mentioned, choosing a suitable location for your rental investment strategy is essential to becoming a successful New Jersey real estate investor. After all, location determines the demand for rentals, rental income, expenses, and your potential return on investment.
Before buying a New Jersey rental property for sale, you should study the market carefully to choose a profitable location for owning a traditional or Airbnb rental. Fortunately, Mashvisor can help you make an informed decision by providing all the data you need.
5 Best Cities in New Jersey for Traditional Rental Investment
To find the best cities for traditional rental investment, you should consider the economic conditions, job opportunities, population growth rate, and safety of an area. You should also look at the median price, available traditional rentals, monthly rental income, and average cash on cash return.
We chose the top cities with a median price below $1 million and an average rental income of more than $2,000 per month. Plus, we only included cities with a cash on cash return of 2% or higher.
Here are the cities that we think are best for long-term rentals, arranged from those with the highest to the lowest cash on cash return:
1. Brick, NJ
- Median Property Price: $430,025
- Average Price per Square Foot: $276
- Days on Market: 71
- Number of Traditional Listings: 141
- Monthly Traditional Rental Income: $2,356
- Traditional Cash on Cash Return: 3.52%
- Traditional Cap Rate: 3.62%
- Price to Rent Ratio: 15
- Walk Score: 75
2. East Orange, NJ
- Median Property Price: $333,878
- Average Price per Square Foot: $166
- Days on Market: 57
- Number of Traditional Listings: 100
- Monthly Traditional Rental Income: $2,117
- Traditional Cash on Cash Return: 3.50%
- Traditional Cap Rate: 3.62%
- Price to Rent Ratio: 13
- Walk Score: 65
3. Brigantine, NJ
- Median Property Price: $639,348
- Average Price per Square Foot: $398
- Days on Market: 55
- Number of Traditional Listings: 117
- Monthly Traditional Rental Income: $2,506
- Traditional Cash on Cash Return: 2.57%
- Traditional Cap Rate: 2.61%
- Price to Rent Ratio: 21
- Walk Score: 37
4. Fort Lee, NJ
- Median Property Price: $757,857
- Average Price per Square Foot: $357
- Days on Market: 63
- Number of Traditional Listings: 247
- Monthly Traditional Rental Income: $3,138
- Traditional Cash on Cash Return: 2.44%
- Traditional Cap Rate: 2.49%
- Price to Rent Ratio: 20
- Walk Score: 94
5. Bloomfield, NJ
- Median Property Price: $448,000
- Average Price per Square Foot: $311
- Days on Market: 53
- Number of Traditional Listings: 135
- Monthly Traditional Rental Income: $2,393
- Traditional Cash on Cash Return: 2.27%
- Traditional Cap Rate: 2.31%
- Price to Rent Ratio: 16
- Walk Score: 63
If you’re ready to find the best traditional rental property for sale, start your search using Mashvisor’s database now.
5 Best Cities in New Jersey for Airbnb Rental Investment
The best cities for Airbnb rental investment are those that are near tourist destinations. It’s also important to consider the seasonality of vacation rentals when choosing a location. For instance, if you want to target beachgoers, understand that your vacation rental will see a low occupancy rate during the cold season.
We’ve selected the top cities for vacation rentals with a median price below $1 million and an average monthly income of over $2,000. We only included cities with an Airbnb occupancy rate of 50% or more and a cash on cash return of 2% or higher. Locations with a high walk score are a plus.
Here are the best cities for Airbnb investing in New Jersey, ranked in descending order in terms of cash on cash return:
1. Garfield, NJ
- Median Property Price: $502,130
- Average Price per Square Foot: $261
- Days on Market: 56
- Monthly Airbnb Rental Income: $4,288
- Airbnb Cash on Cash Return: 5.79%
- Airbnb Cap Rate: 5.90%
- Airbnb Daily Rate: $140
- Airbnb Occupancy Rate: 68%
- Walk Score: 86
2. Linden City, NJ
- Median Property Price: $401,279
- Average Price per Square Foot: $283
- Days on Market: 75
- Monthly Airbnb Rental Income: $3,627
- Airbnb Cash on Cash Return: 4.30%
- Airbnb Cap Rate: 4.40%
- Airbnb Daily Rate: $150
- Airbnb Occupancy Rate: 60%
- Walk Score: 60
3. Fairview Boro, NJ
- Median Property Price: $591,500
- Average Price per Square Foot: $304
- Days on Market: 115
- Monthly Airbnb Rental Income: $2,790
- Airbnb Cash on Cash Return: 3.93%
- Airbnb Cap Rate: 4.03%
- Airbnb Daily Rate: $104
- Airbnb Occupancy Rate: 71%
- Walk Score: 91
4. Little Falls Twp., NJ
- Median Property Price: $482,908
- Average Price per Square Foot: $259
- Days on Market: 73
- Monthly Airbnb Rental Income: $3,688
- Airbnb Cash on Cash Return: 3.23%
- Airbnb Cap Rate: 3.29%
- Airbnb Daily Rate: $125
- Airbnb Occupancy Rate: 66%
- Walk Score: 15
5. Kenilworth, NJ
- Median Property Price: $543,486
- Average Price per Square Foot: $321
- Days on Market: 41
- Monthly Airbnb Rental Income: $3,277
- Airbnb Cash on Cash Return: 2.13%
- Airbnb Cap Rate: 2.16%
- Airbnb Daily Rate: $141
- Airbnb Occupancy Rate: 58%
- Walk Score: 84
Are you ready to invest in New Jersey Airbnb rentals? Work with Mashvisor to search for the most profitable Airbnb properties now.
Find Rental Properties for Sale in New Jersey Through Mashvisor
Investing in rental properties for sale in New Jersey can be a good opportunity to earn profitable income. Before you start searching for properties for sale in NJ, make sure to consider all the important factors we’ve mentioned above. They can help you determine the best locations for investing in New Jersey rentals.
Keep in mind that New Jersey is a large state in terms of geographical area. The state itself is strategically located so residents can access a variety of tourist destinations, as well as other neighboring cities like New York City and Philadelphia. You should also choose a strategic area depending on your planned rental strategy to attract several renters.
When you’re ready to find the best New Jersey investment properties for sale, you can start your search using Mashvisor’s database. Our database contains the most up-to-date listings for sale across the United States.
All you need to do is type the city or neighborhood of your choice, which will lead you to a page showing all properties for sale in that area. Click on a property that interests you to see the key metrics, including the cash on cash return, cap rate, average rental income, expected expenses, and occupancy rate.
You’ll get access to the rental property calculator, which allows you to calculate your potential returns based on several factors, including your financing method and expenses. Plus, you can check the neighborhood comps and rental property analysis to help you make an educated investment decision.
