Nestled between the bustling metropolis of New York City and the historic charm of Philadelphia, lies an investment gem – New Jersey, also known as the Garden State.
This vibrant state, often overlooked by its towering neighbors, boasts a unique blend of urban development and suburban tranquility, making it an attractive prospect for foreign nationals seeking to enter the US real estate market.
Its strategic location offers accessibility to nearby major metros along the eastern seaboard while maintaining a more balanced cost of living. New Jersey’s steady population growth and flourishing job market enhance its appeal to a wide array of residents, from young professionals to established families.
In this blog post we’ll discuss some of the top markets for real estate in New Jersey and explain why it’s catching the eye of foreign investors from around the world seeking US financing for rental property.
Population and Job Growth
The Garden State has been blooming with significant population and job growth. New Jersey’s private sector has been a major contributor to the state’s job growth, accounting for a significant proportion of the payroll growth.
This robust expansion is attracting more people to the state, leading to a steady rise in population. Employment opportunities are occurring throughout the state. From the bustling city of Jersey City to the quieter counties, all regions have experienced an uptick in job growth.
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Source: World Population Review
Population
- Estimated population as of July 1, 2022, is nearly 9,262,000 (as of July 2022).
- The state experienced a population increase of 5.7% from 2010 to 2020.
- Jersey City saw the largest population increase of any municipality in New Jersey since 2010.
- Median age is 40.4, a figure a little higher than in the US.
- Per capita income is $51,272, about 25% higher than the amount in the US.
- Median household income is $96,346, about 30% greater than the figure in the United States.
Source: St. Louis Fed
Economy
- GDP is nearly $777 billion vs. $534 billion in 2012, according to data from the St. Louis Federal Reserve.
- Unemployment rate is 4.2% (BLS August 2023).
- New Jersey’s principal industries are life sciences, information technology, financial services, pharmaceuticals, manufacturing, and transportation/logistics.
- Largest employers in NJ include AbbVie, Accenture, ADP, and Amazon.
- New Jersey boasts a labor force of more than 4.3 million, accounting for 1.1% of US GDP.
- The state is home to 14 Fortune 500 companies, including Johnson & Johnson, Prudential Financial, Merck, PBF Energy, and Avis Budget Group.
- Institutions of higher education include Rutgers University, Montclair State University, Rowan University, and the New Jersey Institute of Technology.
- Over 43% of residents hold a bachelor’s degree or an advanced degree, about 25% higher than the rate in the United States (Census Reporter).
- New Jersey boasts a robust transportation infrastructure including major routes like Interstates 95, 78 and 80, ports such as Port Newark-Elizabeth, and Newark Liberty International Airport (EWR).
Analyzing New Jersey’s Real Estate Market: Homes for Sale Insights”
Source: Zillow
The housing market has seen a consistent upward trajectory in home values over the years, creating a robust investment environment. Homes are quickly going under contract, while the median sale to list ratio reveals that properties often sell near or above their listing prices. Forecasts suggest the upward trend in home values is set to continue, positioning New Jersey as a promising prospect for potential investors.
Here are the most recent housing market statistics from Zillow (August 31, 2023):
- Typical home value is $492,394.
- Increase of 5.2% year over year.
- Home values have increased by 46.2% over the past 5 years.
- New listings are taking 15 median days to move to pending (go under contract).
- The 1-year Zillow Market Forecast predicts home values will continue rising.
Buying Investment Property in New Jersey
Here are five of the largest housing markets to consider for rental property investment. These areas offer a range of opportunities, from single-family home rentals and small multifamily residences to condos and Airbnb vacation rental properties. All of these cities have renter-occupied households of 60% or more.
Population statistics from Data USA and current home values as of August 2023, sourced from Zillow, provide valuable insights into the market dynamics. Additionally, data from Zumper on median rent prices for three-bedroom properties (as of October 2023) helps paint a comprehensive picture of the rental landscape in these promising markets.
Newark
Newark is uniquely positioned in the heart of the Metro New York region. The city is a bustling hub for business and education, boasting a thriving economy driven by its strategic location as a transportation and logistics hub. Newark is predominantly renter-occupied, with approximately 77% of households renting their homes.
- Population: 281,900
- Change in population (since 2020): 0.3%
- Home value: $429,876
- Change in home values (5-year): 69.1%
- Median rent: $2,100
- Rent change (year over year): 5.0%
Jersey City
Jersey City is the county seat of Hudson County, and is located along the Hudson River across from Manhattan. The city is known for its diverse culture, robust economy, and educational institutions like New Jersey City University. About 70% of households in the city are renter-occupied, reflecting its dynamic residential landscape.
- Population: 262,650
- Change in population (since 2020): 0.3%
- Home value: $582,819
- Change in home values (5-year): 18.4%
- Median rent: $3,400
- Rent change (year over year): 6.0%
Paterson
Paterson holds a unique place in history as America’s first planned industrial city and the birthplace of the American Industrial Revolution. Located in the southern part of Passaic County, this culturally diverse city is known for its historic sites and attractions such as the Great Falls. About 74% of households in Paterson are renter-occupied.
- Population: 145,500
- Change in population (since 2020): -0.2%
- Home value: $427,570
- Change in home values (5-year): 74.7%
- Median rent: $2,200
- Rent change (year over year): 5.0%
Elizabeth
Elizabeth, New Jersey, is one of the oldest cities in the U.S. It hosts the largest IKEA in the state, an international seaport, and Newark Liberty International Airport, making it a significant hub for commerce and job growth. With a diverse population and a robust education system including institutions like Union County College, renters occupy 74% of the households in the city.
- Population: 128,500
- Change in population (since 2020): 0.1%
- Home value: $473,579
- Change in home values (5-year): 74.0%
- Median rent: $2,625
- Rent change (year over year): 9.0%
Trenton
Trenton, the capital city of New Jersey, has a unique heritage of industrialization dating back to pottery and rubber industries. Today, it’s a vibrant business hub with a bustling central business district. Trenton boasts diverse economic opportunities, from shipbuilding to modern enterprises, making it a city of historical charm mixed with contemporary growth.
- Population: 368,100
- Change in population (since 2020): 0.0%
- Home value: $304,954
- Change in home values (5-year): 83.5%
- Median rent: $1,800
- Rent change (year over year): -3.0%
Smaller Cities To Buy Investment Properties in NJ
Investors often favor smaller cities and towns for rental property due to their affordability, less competition, and potential for higher returns. These areas may have more stable rental demand and lower vacancy rates due to close-knit communities. Growth spurts from new industries or infrastructure development can lead to property appreciation, offering the potential for both steady rental income and capital growth.
Here are 10 smaller cities and towns in NJ to consider owning rental property in:
- Clifton
- Camden
- Passaic
- East Orange
- Bayonne
- Asbury Park
- Atlantic City
- Cherry Hill
- Hoboken
- Monmouth
Maximizing Real Estate Investment Success in New Jersey
Investing in rental properties in New Jersey offers compelling opportunities, yet it also presents unique challenges. A well-rounded real estate team can provide invaluable assistance when investing in US real estate.
At the heart of this team is an investor-friendly real estate agent who understands the nuances of the New Jersey market. Their knowledge of the market trends and negotiation prowess can be instrumental in securing profitable deals for investors.
Additionally, a reliable property management company is advisebable. They ensure the property remains in excellent condition, tenants are content, and rental income remains consistent. This allows investors to reap the benefits of their investment without the headache of daily property management.
However, the key piece that completes this puzzle for foreign nationals is a reliable source of financing. This is where Lendai comes into play.
As a fintech lender, Lendai leverages cutting-edge technology, including unique AI algorithms, to transform how foreign investors access US financing. By underwriting the borrower in their original country and with loan specialists from the investor’s country of originLendai simplifies the financing process, making it quick and efficient.
All these elements combined – the right real estate agent, a diligent property management company, and Lendai – help to create an ideal environment for successful real estate investment in New Jersey. With this team, foreign nationals can confidently navigate the complexities of the market, turning promising opportunities into profitable investments.
