Jersey City Real Estate Market: Should You Invest Here in 2019?

2019 is seeing its fair share of successful real estate markets in many of the country’s regions. One of the top performing markets in the Mid-Atlantic region during the year is the subject of this blog: the Jersey City real estate market. Is investing in rental properties in the city a good investment? What does Jersey City’s housing market data look like? Is Airbnb legal in Jersey City? Keep reading to get answers to these questions!

Related: Location, Location, Location: What Makes for the Best Place to Invest in Real Estate?

Jersey City Real Estate Market: Traditional Real Estate Market Trends

• Increased Demand

There are many trends contributing to the success of the Jersey City real estate market. When it comes to its long-term rentals, increased demand is at the forefront. According to Mashvisor’s housing market data, which you can learn more about by clicking here, the price-to-rent ratio of Jersey City is 24.6. This indicates that buying property in Jersey City is more expensive than renting. The net result is more renters than buyers, a definite advantage for a real estate investor. The Jersey City real estate market has a large tenant pool, with roughly 73% of its residents renting an investment property. Multi-family investment properties, in particular, are very common, constituting 85% of the city’s real estate properties according to NeighborhoodScout.

• Demographic Push

One of the factors driving the city’s increased demand is an increase in the population. Since 2000, the city’s population has had a growth of 10.78%. Many of the newcomers are leaving New York’s overpriced cost of living in favor of an affordable alternative that is still within proximity to the region. This migration trend doesn’t seem to be slowing down anytime soon, further bolstering the long-term rentals in the Jersey City real estate market.

• High Rental Income and Appreciation

To add icing to the cake, Jersey City is also a very profitable location for traditional real estate investors. The average traditional rental income of a Jersey City real estate investment, according to Mashvisor, is $2,245.

Jersey City houses for sale also have high appreciation rates. Jersey City’s estimated 2019 price growth is 3%, more than the national 2.2%. The Jersey City housing market has been in the national top 20 percent in real estate appreciation over the last decade with 31.4% based on data from NeighborhoodScout.

Related: The Top 6 Strategies to Boost Your Rental Income as a Real Estate Investor

Best Neighborhoods for Traditional Rentals

So, you might be wondering where to buy investment property for traditional investing in Jersey City to take advantage of the above-mentioned factors. Luckily, Mashvisor’s heatmap has the answer. The best neighborhoods to buy traditional long-term rentals in Jersey City are Liberty Park and Hackensack Riverpark.

Liberty Park

• Median Property Price: $532,863
• Price Per Square Foot: $329
• Price-to-Rent Ratio: 14

Traditional

• Rental Income: $3,241
• Cap Rate / Cash on Cash Return: 2%

Hackensack Riverpark

• Median Property Price: $576,633
• Price Per Square Foot: $256
• Price-to-Rent Ratio: 19

Traditional

• Rental Income: $2,529
• Cap Rate / Cash on Cash Return: 1%

Is Airbnb Legal in Jersey City?

Before we discuss Jersey City short-term rentals, we need to address an important question: Is Airbnb legal in Jersey City? The answer is yes! One of the city’s most notable Airbnb laws is a 6.625% sales tax and a 5% hotel occupancy tax. Before deciding to purchase an Airbnb Jersey City real estate investment, be sure to be aware of the other important Airbnb regulations in the city.

Jersey City Real Estate Market: Airbnb Real Estate Market Trends

• Cultural Events and Sites

Like in many markets, the Airbnb Jersey City real estate market thrives off its cultural events and sites, attracting tourists from across the country. The city’s notable landmarks, like the Statue of Liberty National Monument, museums, like the Afro-American Historical and Cultural Society Museum, and its events, like the Shakespeare Festival, are huge catalysts for Airbnb Jersey City’s success.

• Local Airbnb Comfort

Jersey City sits at a comfortable position due to its Airbnb legalization. Investing in rental properties for Airbnb is illegal in nearby NYC. This has made Jersey City a destination for those wanting to visit New York City, due to the two cities’ close proximity. As a result, Jersey City short-term rentals have become plentiful and profitable.

• Profitability

And of course, investing in rental properties for Airbnb is very lucrative in Jersey City. The city’s average rental income is $2,866 and the average return on investment in many of its neighborhoods, such as the ones to be mentioned, is very high. Airbnb is a more profitable investment strategy for a Jersey City real estate investment.

Related: What Kind of Airbnb Occupancy Rate Can You Expect?

Best Neighborhoods for Airbnb Rentals

According to Mashvisor, the best neighborhoods to buy Airbnb rentals in the Jersey City real estate market are Lincoln Park and The Heights.

Lincoln Park

• Median Property Price: $581,475
• Price-to-Rent Ratio: 26

Airbnb

• Rental Income: $3,785
• Cap Rate / Cash on Cash Return: 3%
• Occupancy Rate: 63%

The Heights

• Median Property Price: $654,590
• Price Per Square Foot: $500
• Price-to-Rent Ratio: 29

Airbnb

• Rental Income: $3,254
• Cap Rate / Cash on Cash Return: 2%
• Occupancy Rate: 76%

Jersey City Real Estate Market: Best Neighborhoods for Traditional and Airbnb

Some neighborhoods in the Jersey City real estate market are excellent for both traditional and Airbnb investing. The best neighborhoods for buying property in Jersey City for either strategy are Bergen-Lafayette and West Side.

Bergen-Lafayette

• Median Property Price: $454,800
• Price-to-Rent Ratio: 20
• Price Per Square Foot: $296

Traditional

• Rental Income: $1,914
• Cap Rate / Cash on Cash Return: 1%

Airbnb

• Rental Income: $2,769
• Cap Rate / Cash on Cash Return: 3%
• Occupancy Rate: 71%

West Side

• Median Property Price: $366,837
• Price-to-Rent Ratio: 18
• Price Per Square Foot: $260

Traditional

• Rental Income: $1,703
• Cap Rate / Cash on Cash Return: 1%

Airbnb

• Rental Income: $2,210
• Cap Rate / Cash on Cash Return: 2%
• Occupancy Rate: 63%

All in all, the Jersey City real estate market is a market many investors should consider for investing in rental properties. To find Jersey City houses for sale, and investment properties for sale all around the US, click here to start your 14-day free trial with Mashvisor!