Top 5 Best Real Estate Investment Markets in New Jersey

Kristine Cameron

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Kristine Cameron

September 30th, 2022
Updated September 30th, 2022

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In recent years, the Garden State has become highly appealing to investors across the country. Use this guide to discover the best real estate investment opportunities and strategies for finding undervalued properties in New Jersey!

Overview of New Jersey real estate trends

New Jersey is a highly competitive market for real estate investors. Home prices surged following the 2020 Covid pandemic, with the cost of an average single-family home increasing by about $100,000 between 2020 and 2021.

The state is seeing major economic growth now that Covid restrictions have been lifted, which is also attracting more people in search of work.

Although investors may face lower profit margins in New Jersey compared to other states, there are still great opportunities in certain markets.

In this article, we'll highlight the top five real estate markets for different types of investors.

💰 Looking to invest in real estate?

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Top 5 New Jersey real estate markets in 2022

🏆 Best overall
🌴 Best for vacation rentals
📅 Best for long-term rentals
💸 Best for house hacking
🏡 Best for flipping

Ultimately, the best investment market for you depends on your personal goals. If you want to flip a home, you probably won't be looking for the same criteria as a vacation property investor.

Some investors focus on appreciation to avoid paying capital gains every year, whereas others like the steady stream of income that comes from long-term rentals. We've identified some of the best investment markets for multiple strategies below, but you can also use our rental property calculator to evaluate individual properties.

To find the best real estate investment market in New Jersey, we compiled data across the state. We evaluated property appreciation rates, affordability based on average income, and profitability based on the costs of renting versus buying a home. Learn more about our methodology.

» LEARN: Real Estate Investing — A Complete Guide To Getting Started

Best overall: Camden

🏡 Median home value
$107,431
📈 Property appreciation rate
26%
💰 Median household income
$28,623
🔑 Median gross rent
$938
🏦 Median mortgage cost
$1,068

With below-average home values, high year-over-year property appreciation rates, and opportunities for short- and long-term rentals, Camden is our top pick for investors.

About 40% of Camden residents are renters, and approximately 6,600 students attend the Camden campus of Rutgers University each year. In addition to standard rental properties, providing student housing near campus is another great option for long-term investors.

Camden also has plenty of redevelopment opportunities for house flippers or investors interested in building new properties. The city is full of older homes that haven't been updated since World War II. Modernizing these properties or building new homes will help accommodate the city's growing population.

Another perk of investing in Camden is its easy access to Philadelphia, which is directly across the Delaware River. Camden is more attainable for people who need to be near Philadelphia for work but can't afford its skyrocketing housing costs.

Best for vacation rentals: Ocean City

🏡 Median home value
$638,410
📈 Property appreciation rate
20.16%
💰 Median household income
$72,385
🔑 Median gross rent
$1,291
🏦 Median mortgage cost
$2,567

The Travel Channel named Ocean City “the #1 family beach community in the country," making it our top pick for vacation rental properties.

Unlike other beachfront towns, tourists visit Ocean City year-round for a wide array of events and festivities. The city is full of family-friendly activities, including eight miles of beaches, a waterpark, concerts, and annual events like car shows, block parties, parades, art shows, and holiday festivals. The consistent stream of visitors means that vacation rentals will earn steady profits all year long — not just during the peak summer months.

Furthermore, home values in Ocean City appreciate by approximately 20.16% year-over-year. If you decide to sell your rental property in the future, it'll be easy to earn a profit without having to do expensive renovations.

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Best for long-term rentals: Newark

🏡 Median home value
$420,422
📈 Property appreciation rate
17.4%
💰 Median household income
$64,994
🔑 Median gross rent
$1,096
🏦 Median mortgage cost
$1,621

Long-term investors can confidently invest in Newark, the biggest city in New Jersey and one of the fastest-growing cities in the state. In 2020, Newark had a booming population of 311,549 residents, many of whom were priced out of other neighborhoods in the New York metro area.

However, the Rutgers Center on Law, Inequality and Metropolitan Equity (CLiME) recently released a report stating that about 47% of Newark's residential properties are owned by corporations. This is one of the highest rates in the country, so city officials are taking steps to reduce the power of these major investors. This means individual investors have a significant advantage over the large corporations attempting to take over Newark.

It's possible to earn a profit as long as units are priced fairly according to each neighborhood's median income.

Despite the concern about corporate investors, Redfin defines Newark's real estate market as "somewhat competitive." Would-be investors won't pay too much more than a property's appraised value on average, which leaves room for plenty of profit potential.

Best for house hacking: Cherry Hill

🏡 Median home value
$400,857
📈 Property appreciation rate
8.8%
💰 Median household income
$91,818
🔑 Median gross rent
$1,555
🏦 Median mortgage cost
$2,276

Niche gave Cherry Hill an A+ ranking in its Best Places to Live in 2021 report. Niche reached this conclusion based on the quality of the area's schools, cost of living, housing trends, employment outlook, and local amenities.

Cherry Hill is a great area for families with its strong job market, growing economy, and highly rated public schools. Homes in the city are steadily increasing in value by about 8.8% year over year, and the location makes it easy to get to major nearby cities, including New York City, Philadelphia, and Washington, D.C.

Although just 21% of Cherry Hill residents are renters, the city's medium-sized population increased by nearly 5% between 2010 and 2020. This signifies that there's a growing market for long-term rental options and house hacking opportunities.

» MORE: House Hacking — How To Live For Free With Real Estate Investing

Best for flipping: Atlantic City-Hammonton

🏡 Median home value
$311,330
📈 Property appreciation rate
17.13%
💰 Median household income
$63,680
🔑 Median gross rent
$1,129
🏦 Median mortgage cost
$1,982

With population growth expected in the near future and a comparatively affordable housing market, this metro area is ripe for house flippers to earn high profits.

Atlantic City was rated as the most affordable beach town in the nation by Inman in 2022, and homes are appreciating by about 17.13% year-over-year. These market conditions allow house flippers to easily find and purchase cheap properties and resell them without having to undergo major renovations to earn a profit.

Atlantic City-Hammonton Metro Area's cost of living is 6.7% lower than the U.S. average, and the Long-Range Transportation Plan includes improving public transportation options, reducing traffic congestion, creating safer conditions for cyclists and pedestrians, and repairing major roadways. These measures will help current residents find affordable transportation and have access to more employment opportunities.

Another positive sign is the homeownership rate in Atlantic City-Hammonton is about 66.9%. This shows more people are interested in buying a home than renting, which is great for house flippers who want to sell quickly.

How to find undervalued New Jersey properties

The best deals in New Jersey are homes that only need cosmetic repairs or homes with motivated sellers. Types of homes that make good investments often include foreclosures, pre-forecloses, short sales, and abandoned or neglected properties. Here's how to find them.

1. Use real estate investment software

One of the biggest challenges of flipping homes or finding rental properties in New Jersey is finding great deals. But the DealMachine app is one tool that can really help you.

DealMachine's real estate software helps New Jersey investors find distressed homes (such as pre-foreclosures, foreclosures, or short sales) and get in touch with owners fast via batch skip tracing and direct mail campaigns.

DealMachine's driving for dollars app is fast and easy to use. When you're driving around town and spot a home that could be a great deal (maybe it's been abandoned or neglected), you can send the owner direct mail through the app for huge time savings (no post office visits required).

Download the DealMachine app to find undervalued properties as you drive. DealMachine offers a 7-day free trial and $15 in free credits that can be used towards marketing (like sending out direct mail to homeowners).

Other popular real estate software or websites for flippers to consider include:

  • Flipster: Primarily targeting house flippers, this app helps users find motivated seller leads, while also providing valuable comparable property information to help you estimate a home's fair market value before making an offer.
  • Flipperforce: The Flipperforce app helps BRRRR method investors analyze home values to calculate the maximum purchase price to offer on a property before making a purchase.
  • Stessa: Stessa's software allows you to easily track the performance and financial status of all your properties in one easy-to-use app. It provides regular reports on how profitable your properties are and can be linked to your financial accounts for automatic updates.

2. Look for FSBO homes

Investing in a FSBO (for sale by owner) property may get you a better deal since you'll be negotiating directly with the seller instead of a listing agent. Many FSBO sellers are more concerned about selling quickly than earning the highest possible profit, which can help you keep more money in your pocket.

Zillow's foreclosure center is one great resource for finding foreclosed and bank-owned properties in your area. However, unlike off-market properties you'd find on DealMachine and other software, most of Zillow's properties are publicly listed — meaning you'll likely face stiff competition from other investors.

» MORE: Use Clever's rental property calculator to evaluate off-market deals

3. Partner with an investor-friendly agent

Using an experienced realtor is the best way to ensure a favorable, easy home purchase.

Great agents understand New Jersey's different investment markets, are familiar with real estate laws, and can provide access to lesser-known neighborhoods to help you discover your dream investment property.

Clever's real estate agents can guide you through New Jersey's real estate market and make your house-hunting journey a breeze. Eligible buyers can even get back 0.5% of their home's purchase price after closing, which could help you save thousands.

👋 Start your real estate investing journey now!

Buy your investment property with a top local realtor who specializes in helping real estate investors find great deals. Clever can connect you with investing pros at trusted brands like Keller Williams and RE/MAX.

Enter your zip code to get personalized agent matches sent straight to your inbox. Compare your options until you find the perfect fit, or walk away with no obligation. Try Clever's free service today!

Methodology

We used data from the U.S. Census Bureau and Zillow to determine which cities offer the greatest investment opportunities. For each city, we considered the median mortgage cost, average rent prices, median household income, and annual property appreciation statistics.

We also considered how successful different types of investments — such as house flipping, vacation rentals, and traditional single-family homes — may be in each market to help investors reach their goals.

Frequently asked questions

Our top five picks for investors include Camden, Ocean City, Newark, Cherry Hill, and Atlantic City-Hammonton. Each of these cities have unique investment opportunities available to specific investors.

We recommend using specialized real estate investment software — such as DealMachine — or partnering with a knowledgeable local real estate agent.

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