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I would like to know if investing on buying a condo in East Brunswick and renting it after 5 or 7 years is a good option. We are choosing this due to school district and availability of condos in 200k range.
So you intend to buy one there and live in it, then rent it out after 5-7 years after you move elsewhere? Is that correct?
Idea is to move to a town home/SFH in middlesex county itself after 5-7 years and make this as a rental investment property. Concerned about whether I can rent it fast most of the time. If not sell this condo and buy a rental investment property elsewhere (Edison/South Brunswick/Princeton areas).
Have a 6 yr old school going kid hence choosing East Brunswick from good school district point of view.
The rental market is always strong, but as EBWick noted, we have no way of knowing the future, aside from the fact that I'll be eating pizza tonight. It all depends on what you need the rent to be versus your carrying cost. I'll give you my example. We bought a new construction townhouse in South Brunswick for about $120k. The location was perfect for both of our job commutes (in the middle of each). We loved it, and then big snowstorms came, and lots of red wine, and then kids popped up 9 months later. Go figure. So we decided to sell and buy a proper tract house with yard, pool, fence for the dog, and so on. But the market had crashed at that time. We couldn't sell the place for anywhere near what we owed on it. So we took on renters who covered the overhead at about what we needed. This worked out well for a bit shy of 3 years when the family renting the place decided it was time to buy their own house. By now, the market was turning upward, so we sold the place to the first person who answered our ad for tens of thousands more than we paid. Needless to say, had we held onto it longer, we would have had a much nicer profit, But hindsight and all that. What was key here is the current tax law that allows you a free pass on RE profit if you have lived in the dwelling 2 of the previous 5 years. Since we made that cutoff by about 2 weeks, we paid no tax on the gain. I could go on, and would be happy to share more experiences on this topic with you if you'd like to PM me.
The rental market is always strong, but as EBWick noted, we have no way of knowing the future, aside from the fact that I'll be eating pizza tonight. It all depends on what you need the rent to be versus your carrying cost. I'll give you my example. We bought a new construction townhouse in South Brunswick for about $120k. The location was perfect for both of our job commutes (in the middle of each). We loved it, and then big snowstorms came, and lots of red wine, and then kids popped up 9 months later. Go figure. So we decided to sell and buy a proper tract house with yard, pool, fence for the dog, and so on. But the market had crashed at that time. We couldn't sell the place for anywhere near what we owed on it. So we took on renters who covered the overhead at about what we needed. This worked out well for a bit shy of 3 years when the family renting the place decided it was time to buy their own house. By now, the market was turning upward, so we sold the place to the first person who answered our ad for tens of thousands more than we paid. Needless to say, had we held onto it longer, we would have had a much nicer profit, But hindsight and all that. What was key here is the current tax law that allows you a free pass on RE profit if you have lived in the dwelling 2 of the previous 5 years. Since we made that cutoff by about 2 weeks, we paid no tax on the gain. I could go on, and would be happy to share more experiences on this topic with you if you'd like to PM me.
The original attempted sale was around 1998 and the eventual sale took place in 2001. Since then, the typical prices in that development are about stable at around 70 % more than what we sold for. One consideration though is that even good renters can trash a place. Ours had a cat (don't allow cats). The carpets were ruined with urine stench and had to be ripped up.
Condo has so much overheads, strict renting rules. In addition to pay property taxes, you pay a high management fee. Deducting all the taxes and fees, you almost have nothing left.
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