What can a beginning investor do to get his foot in the door in a place like Northern Jersey where houses seem to be going down but still overwhelmingly inflated?
I keep hearing about the 2% rental rule, but that will not fly here nor will it for years to come. So you’re saying a $350,000 house, which is the market rate for a 2 family home, should be rented out for $6000?? A typical 2 bedroom rent for a decent area is $1200-$1400.
Does that mean I shouldn’t invest now? I’m looking for some guidance in terms of what angle to approach in such an inflated state.
WOW! You can get 1200-1400 for a 2 bedroom. I can only get $350-500 for a 2 bedroom. $600 for a 3 bedroom. Im just going off of what people are asking for in the newspapers still but wow, its amazing how different rent rates are across the country!
Yeah but you don’t get how much such a small property is in the first place, at least $450k and only until recently are they cheaper than that.
So obviously when I read these forums and here your rent rates, purchase prices, profits, etc I’m confused and don’t know how to get my foot in the door. :anon
Omar, your investing strategy will be determined by the market conditions you plan on investing in. For example, in your area as you describe it, it isn’t possible to buy and hold a SFR with those numbers. Better to look at other techniques rather than buy and hold, (options? assignments?), or look outside the area to locations that are more affordable and offer cash flow if that’s what you’re after.
Since I’m new I don’t know, but thankfully I have had someone from this forum who is also from NJ contact me and offer some guidance. I’m really seeing how different things can be from state to state.
Maybe there are other things in NJ too, since we’re so overpopulated, such as commercial real estate.
Omar,
To find out what the other people in northern NJ are doing you need to go to your local real estate investor’s club meeting. The people that are making money in real estate will be there. Find out what works there and imitate them. You can find a club here http://www.reiclub.com/real-estate-clubs/New%20Jersey.html