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Dorianwales, stay away from anything that yields a 5% ROI. You need 10% or better in this game. Anything less and you are asking for trouble. A new roof could cost you 5k, new water heater could cost you $500, new furnace maybe $2000. Anything can go wrong, you can loose rents to deadbeat tenants, you need enough padding in there to weather the storms unless you are independently wealthy and are just doing this as a hobby. The properties are out there but they take some work to dig up and find, and with the high taxes in NJ i personally prefer to be the long distance landlord. It's not for everybody. Another place to look is Philadelphia, in a good area of course (I stay out of the slums).
There are so many options when you want to invest in real estate. If you live in south Jersey - investing here makes sense. Yo can easily service your property. My rule is this: the scuzzier the area - the greater the cash return on the property. SO - you need to look at the kind of community you want to invest in. Do you want commercial or residential or mixed use? The more units per building the better the cash flow and the less damage will be done by a bad tenant (you'll still have income if one tenant stops paying rent). Do you want to update a property and build equity that way? You may also want to look at student housing - properties tend to get beat up a bit more- but you have less concern about a tenant loosing a job and not paying. As I said - there are many choices and an experienced realtor can guide you to the best option for you.
Location: The place where the road & the sky collide
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Originally Posted by Sandi Lichtman
There are so many options when you want to invest in real estate. If you live in south Jersey - investing here makes sense. Yo can easily service your property. My rule is this: the scuzzier the area - the greater the cash return on the property. SO - you need to look at the kind of community you want to invest in. Do you want commercial or residential or mixed use? The more units per building the better the cash flow and the less damage will be done by a bad tenant (you'll still have income if one tenant stops paying rent). Do you want to update a property and build equity that way? You may also want to look at student housing - properties tend to get beat up a bit more- but you have less concern about a tenant loosing a job and not paying. As I said - there are many choices and an experienced realtor can guide you to the best option for you.
Look at his other thread.
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