New Jersey may not get as much recognition as New York for real estate investing, but it is also a great place to invest in real estate. Many people are looking to pursue vacation rentals along the coast, and some markets like Jersey City, Moonachie, and Asbury Park stand out as vacation locations for many investors.
Jeff Rohde at Roofstock zones in particularly on Jersey City, which is one of the top hottest housing markets in the state. It is an affordable place to invest in real estate, but as for the rest of New Jersey, the housing market has been in a bit of a bubble in the last year. Homes are selling very quickly and for more than the asking price. The price of a single family home has risen 7.3% from the year before. Supply is going up and demand is going down.
New Jersey is also home to a variety of New York City suburbs and universities. New Jersey has a variety of national parks and beaches, and the state is much cheaper than neighboring New York. There is very high rental demand in New Jersey given high demand and limited supply, but it’s important to note entry-level buyers often have a very hard time securing loans in the state. New Jersey is known for the highest foreclosure rate in America, but it’s also known for some of the best schools in the country.
Most of New Jersey is seller’s markets, which as state above, means demand is outpacing supply in much of the state. As of May 2022, New Jersey is a place where there is often a housing bubble and bidders are getting into bidding wars over the best real estate in the state. Homes are selling for high prices and higher than listing price more often than not.
Hard money loans might be the best way to invest in real estate in New Jersey. In most of the state (outside the New York City suburbs), these loans have a huge benefit of having very fast speeds of approval. They can be approved in a couple of days, instantly giving real estate investors in competitive areas an edge, whereas if a real estate investor is trying to invest through traditional financing, they often have to wait over a month to be approved.
Hard money loans are approved so fast because they’re an alternative source of financing and have a different asset than mortgages. Hard money loans depend on the property, not the financial standing of the applicant. It’s not like credit score doesn’t matter, as hard money loans have minimum credit score requirements of 600 to 620. But these loans use the property as collateral — if a borrower defaults on a hard money loan, the lender just takes the property, which is a possibility all hard money lenders are prepared for in case they want to turn a profit on the home.
For these reasons, hard money loans also come with significant risks and drawbacks. They have higher interest rates, lower repayment periods, and lower LTV ratios than traditional mortgage loans. Hard money loans often have interest rates between 8–15%, which are much higher than the interest rates of traditional mortgage loans. Hard money loans also have repayment periods of more or less a year, which means they need to be paid back very quickly.
It’s important to only trust the very best hard money lenders, which is why we at Hard Money Lenders IO have selected the best hard money lenders in New Jersey for your real estate transaction.