Real Estate Investors (Newark, East Brunswick: rentals, mortgage, loan)
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I have a question for any real estate investors in here. In what towns do you look for positive cash flow(buy and hold)? Is it possible with the prices/taxes being so high? Are you forced to look out of state?
I'm not an investor but my guess would be if you wanted positive cash flow it's going to need to be a multi-family home. While rentals prices have gone up as people lose their homes, the amount of people renting their homes or parts of their homes out because they've been unable to sell has also increased. A 2009 mortgage would never compete with a 1990 mortgage in terms of rental price it would take to cover the payment.
I do hope to get into real estate investment at some point in my life. When I do, it'll be in college towns where you can always depend on a large number of people looking for rentals every year and being willing to cohabitate. I'm sure that's taken into account in home prices near the larger campuses like Rutgers but I'm sure there are still deals to be found, or created, in the smaller colleges around the state.
Have you explored the idea of buying investment property where property taxes are substantially lower than in any NJ town/ship e.g state of Delaware immediately south of NJ and there is Univ. of Delaware in Newark so you can put two & two (Nemmert's idea) together and even end up with five.!!(lol)
From an investors stand point, it depends how much money you have to put down and what kind of returns you are looking for. With the rates being as low as they are (5% +/-), lots of investments are turning out to work a lot better now. My personal favorites for investors are in Crosspointe in East Brunswick. Here is the scenerio with zero down:
Crosspointe
1 Bedroom Ambiance Unit
Just Rented for $1050
Mortgage for $150,000 @ 5% is $800/Month
Taxes: $200/Month
Association: $250/Month
Difference between Renting & Buying: $200 more a Month
If you have 20% down or more, this is a positive cash flow. If people have the cash lying around, which some investors do, in 15 years this is paid back in full!
From an investors stand point, it depends how much money you have to put down and what kind of returns you are looking for. With the rates being as low as they are (5% +/-), lots of investments are turning out to work a lot better now. My personal favorites for investors are in Crosspointe in East Brunswick. Here is the scenerio with zero down:
Crosspointe
1 Bedroom Ambiance Unit
Just Rented for $1050
Mortgage for $150,000 @ 5% is $800/Month
Taxes: $200/Month
Association: $250/Month
Difference between Renting & Buying: $200 more a Month
If you have 20% down or more, this is a positive cash flow. If people have the cash lying around, which some investors do, in 15 years this is paid back in full!
Where do you get an investment property loan at 5%? And what about maintenance costs? And time without a tenant?
If you did a 30 year 5% with 20% down then the mortgage is ~$650, so you're still not cash flow positive even without considering maintenance, costs of advertising, time without a tenant, etc.
The association fee kills that one...
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