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Re: Anybody know the GRM (price/yearly rent) of typical Downtown condos?
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Home away from home
 
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I totally agree with you. Besides, prices are artificially high right now downtown because there have been so few units on the market. Not sure exactly who's been buying them, but perhaps alot of the pricier ones have gone to uninformed overseas investors who weren't aware of the impending surge of rentals that will be flooding the market between Spring of this year and Spring of next year. That's going to put downward pressure on rents for sure and make it difficult to carry investment condos as rentals at the prices that are being asked.
Posted on: 2015/2/19 1:37
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Re: Anybody know the GRM (price/yearly rent) of typical Downtown condos?
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Home away from home
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Gentrifying markets aren't hard to understand. Like i said in OP, I was just trying to understand this luxury rental condo thing. I know people do it, but the numbers seem to not make any sense unless you're parking money like a Russian oligarch. Taking a $1000+/month haircut to own a condo seems nutty unless you're betting that it'll rise enough to be worth it. But a whole lot of people lost bets like that a few years ago.
Posted on: 2015/2/18 1:55
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Re: Anybody know the GRM (price/yearly rent) of typical Downtown condos?
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Home away from home
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If you (or your friend) are looking to buy, Harrison might be a great bet - it's pretty much the last frontier on the PATH system. There's so much empty land around the PATH station that the entire thing has been master-planned. There are three completely new neighborhoods already taking shape and it's looking phenomenal so far (low-density, urban like Hoboken). It's a hard market to tap into right now (seems like everyone's waiting for prices to pop) but you might find a deal here or there still.
Posted on: 2015/2/18 1:09
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Re: Anybody know the GRM (price/yearly rent) of typical Downtown condos?
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Home away from home
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How do you figure? Show it with numbers. Most GRM's I see just by looking in Zillow at listings with Zestimated rents is in the 16-20 range. Even with a 30 yr those would not cashflow. And I don't consider a 30 investing, it's either for living in or speculating.
Posted on: 2015/2/17 22:48
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Re: Anybody know the GRM (price/yearly rent) of typical Downtown condos?
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Newbie
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most inventory is actually rental it looks like. that being said, I wouldn't say dtjc is a market that will be strongly FCF positive but it will be lower risk (higher quality tenants, more limited "downside", etc). That being said, you can make something work at todays rates but doubt returns will be anything earth shattering.
Posted on: 2015/2/17 22:06
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Re: Anybody know the GRM (price/yearly rent) of typical Downtown condos?
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Home away from home
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That's why the original chart does not make much sense.
Posted on: 2015/2/17 15:47
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Re: Anybody know the GRM (price/yearly rent) of typical Downtown condos?
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Home away from home
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Quote:
That's why the original chart does not make much sense.
Posted on: 2015/2/17 15:46
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Re: Anybody know the GRM (price/yearly rent) of typical Downtown condos?
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Home away from home
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Ah, missed much of the dialogue and insight below. I'll butt out now. :)
Posted on: 2015/2/17 15:44
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Re: Anybody know the GRM (price/yearly rent) of typical Downtown condos?
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Newbie
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One more chart.
According to Zillow, it looks like the Bayonne sales market dipped further than Greenville after 2008 and continues to stay at lower levels. 
Posted on: 2015/2/17 15:28
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Re: Anybody know the GRM (price/yearly rent) of typical Downtown condos?
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Home away from home
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It's an interesting metric, though far from perfect as many point out. Keep in mind that GRM is a metric created for use by those considering an investment in rental property: it estimates how many years in rent it would take for the property to pay for itself. So lower is better. The GRM discrepancy between Greenville and Bayonne is explained by one factor: they both have the same median rent, but home costs are higher in Bayonne. I hope this doesn't set off a typical jclist s**storm about what neighborhoods are safer, and why someone would never set foot in another part of town. It's just math.
Posted on: 2015/2/17 14:58
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Re: Anybody know the GRM (price/yearly rent) of typical Downtown condos?
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Home away from home
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How do you mean? Generally, the GRM spectrum runs from high meaning "very desirable" to low meaning "war zone". But very high rents can drop it down. I think in general Bayonne IS considered safer and more desirable than Greenville. Or it could be Greenville rents are rising faster than Bayonne's. GRM is not the most accurate metric but it's relatively easy to obtain.
Posted on: 2015/2/17 1:52
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Re: Anybody know the GRM (price/yearly rent) of typical Downtown condos?
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Home away from home
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Quote:
These #s look strange especially when you compare Greenville to Bayonne the GRM is totally off.
Posted on: 2015/2/16 23:49
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Re: Anybody know the GRM (price/yearly rent) of typical Downtown condos?
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Home away from home
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Yeah, I am not quite understanding the numbers posted in that table. Are those average rents for 1 bd? 2 bd? What, exactly? To quote a median rent, without providing any additional details is almost useless. It would be nice to have a breakdown of median rents (or average, or both) based on housing unit type (studio, 1bd, 2bd, 3bd). Also, the DTJC market can be particularly hard to gauge and average out based on just housing unit type. In a very small space, you have a huge mix of building type (high rise with doorman and amenities, high rise with no amenities, mid-rise with doorman and/or amenities, low-rise with little to no amenities, private houses with whole floor apartments, entire brownstones/houses) and average age of unit plays a role in valuation, as well. None of the new construction happening in DTJC can be had for less than 3K / month. 2 bedrooms are routinely commanding over 3K, and the 3 bedroom units (when you can find them) are going at least 4K. BTW, about that comment that 2+ bd units are in high demand, I am not sure that is at all accurate. Looking around recently, very few places even had 3bd units, and the few developments that featured units of that size, only included a few in their buildings. I would say that, in new developments, 3bd units make up ~10% of all the units in a building. 2 bds are obviously more common, but I think those are as common, or less so, than 1bd units.
Posted on: 2015/2/16 21:14
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Re: Anybody know the GRM (price/yearly rent) of typical Downtown condos?
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Home away from home
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Don't know about other places, but at Liberty Harbor, one bedrooms rent about $2150 - $2300 or so. My friend just rented a place there for $2250 / month.
Posted on: 2015/2/16 19:57
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Re: Anybody know the GRM (price/yearly rent) of typical Downtown condos?
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Newbie
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Built it by hand using data from searches on Zillow's Local page
An example: http://www.zillow.com/jersey-city-nj/home-values/ Has a few assumptions (used recent sales price, not for sale or zillow prices for example) and a few problems (didnt isolate it to condos) but those problems are fairly consistent across geographies.
Posted on: 2015/2/16 17:55
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Re: Anybody know the GRM (price/yearly rent) of typical Downtown condos?
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Home away from home
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Thanks, very cool. Some real numbers, not opinions. Was that a tool on Zillow or did you build that in a spreadsheet and plug the numbers in by hand?
I wonder how much variation there is, if Downtown sales represent newer more expensive properties than rentals. NYC numbers need an "*", since the low taxes show up as higher prices. The odd artifact is Hoboken being a better "non-speculative" investment value than much of JC. It just confirms my choice to invest elsewhere. My purchase 2.5 years ago in the Heights had a GRM of 6.8. Quote:
Posted on: 2015/2/16 16:40
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Re: Anybody know the GRM (price/yearly rent) of typical Downtown condos?
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Newbie
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Had a few minutes this morning and was curious, so I used Zillow to build a chart
Seems from a pure GRM perspective, it's not very attractive right now. 
Posted on: 2015/2/16 14:29
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Re: Anybody know the GRM (price/yearly rent) of typical Downtown condos?
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Home away from home
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westchester county and long island are not building enuff housing,while hudson county building is booming.....sounds like some of you would be happier in long island or westchester county http://newyorkyimby.com/2015/02/westc ... ing-permit-approvals.html
Posted on: 2015/2/16 5:03
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Re: Anybody know the GRM (price/yearly rent) of typical Downtown condos?
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Home away from home
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Any math you do will be rendered unhelpful with all of the inventory coming to market in DTJC alone over the next 12 months. Much obviously depends on how much you put down. The more you put down the less sensitive you are to price fluctuations.
That said the demand for larger units (2+ beds) that can house young families will be where the action is. Speaking from anecdotal experience here.
Posted on: 2015/2/16 3:23
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Anybody know the GRM (price/yearly rent) of typical Downtown condos?
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Home away from home
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I was discussing the local rental real estate market with an out of towner (prompted by the NYTimes condo series), and realized I had no idea about the local condo market. I'd given up on buying investments Downtown long ago. Does anyone know the metrics? Gross Rent Multipliers or Cap Rates? Can one buy a Downtown condo and rent it for enough to at least cover all it's expenses? Or is that market purely speculative and always negative cashflow?
Posted on: 2015/2/16 2:15
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