New Jersey Rentals

Given the continued down fall in real estate, the market shift is towards renting verses buying. Many owners of multiple dwelling complexes (2 family houses through big apartment complexes) are seeing demand pick up. One interesting aspect is how New Jersey fits into all this. New Jersey has the most amount of units for rent per square foot than any other state (in other words, there are a lot of units available for rent given the small size of the state). What we are seeing is renters having an abundance of choices of rental complexes.

While some areas the prices are rising for rents (especially Hoboken / Jersey City area), renters are able to tap a cash strapped market : Homeowners that are overextended. There are many homeowners that can not afford to carry the mortgage, taxes, maintenance, and insurance involved in these “investment properties”. Since these properties can not be flipped, they need to be rented.

To further the pain, these owners still can not charge high enough rent to cover their expenses. Why?

1. They took out a 30 year mortgage with no down payments (owners having overly high monthly payments)
2. There is an OVER ABUNDACE of Homes in NJ for rent (high supply of homes keep the prices of these rentals lower)

As a result, the Renters of New Jersey win out. Now, i’m not saying renting is very cheap. But you are able to find owners that NEED cash flow. They need it so badly that you can negotiate with them on the price if you are moving in quickly.