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Pros and Cons of Buying a House in New Jersey

Pros and Cons of Buying a House in New Jersey

Deciding between buying a house or renting an apartment in New Jersey is an important decision and ultimately boils down to your circumstances. For many, homeownership is often seen as the next step in adulthood as it means you now own an appreciating asset and can decorate and remodel as you see fit without needing to ask a landlord. Still, buying a home isn’t always the best choice, so how do you decide which one is right for your circumstances?

Advantages of Owning a Home

Buying a home is a huge decision and requires a lot more planning than renting a home or apartment. However, there are a lot of benefits to being a homeowner that you might not realize, especially if you have been renting for a long time. 

Consistent Monthly Payments

The biggest benefit is the monthly cost especially in areas with a low cost of living. Gone are the days where you wait for the rent increase letters from your landlord when you want to renew your lease. Instead, you have a 30-year fixed-rate mortgage where the principal and interest rates are the same every month. You can even reduce your payment by refinancing it if the rate drops. If you’re comfortable paying a higher monthly amount, you can go for a short-term mortgage.

Build Equity and Net Worth

Another huge benefit of owning a home is that you build equity with each payment you make. Take a look at the amortization schedule you received that came with your closing paperwork to see how much you’re actually paying towards the interest chargers and loan balance. In the beginning most of your payment will go towards the interest, but over time you’ll pay down more of your loan, which will build equity. In general, it can take up to 10 years to actually build positive equity for your home, but the longer you live there the more wealth you can build.

On that topic, you can convert your home’s equity to cash, which you can use to pay for improvements on your house, consolidate your credit cards, pay for college or a business, or even purchase a vacation home or rental properties. The best part is that you don’t need to sell your house to have access to these funds.  There are a few ways you can have access to the cash:

  • Cash-out refinance – this involves taking out a larger loan amount for more than you currently owe and pocketing the difference. You can usually borrow up to 80% of  your home’s value
  • Home equity loan – a popular choice if you’d rather borrow against your equity without replacing your current mortgage. You’ll get the funds in a lump sum and pay a fixed rate.
  • Home equity line of credit (HELOC) – this works like a credit card but is secured by your home. You only make payments on the amount you use and can pay off and reuse the credit for around 10 years or so.
  • Reverse mortgage – If you’re over the age of 62 you can convert your equity to cash and you won’t have to worry about a monthly mortgage payment

As you increase your equity over the years, your home value will also increase over time so long as there’s no major hiccup in the real estate market similar to the 2008 housing crash. This, in turn, increases your overall net worth and if you do sell, you’ll hopefully be able to pocket a bit of cash.

Build Community

Owning a home provides stability, which is especially important if you have children. Most homeowners live in their homes for 10 years before selling, which means you have plenty of time to get to know your neighbors and for your children to make lifelong friends. Plus, your kids will likely do better in school as they won’t have to worry about moving and you can be involved with community organizations like school boards, PTA, etc.

Disadvantages of Owning a Home

While homeownership is great, there’s a reason why many people opt to rent apartments instead of purchasing a house. Not everyone is right for ownership so it’s important to weigh the pros and cons before you decide to take the plunge.

High Upfront Costs

While owning a house might be cheaper in the long run, you have to put up a lot of money in order to close. People often save for years to have enough to afford the downpayment for a house. And that’s just the beginning of upfront costs. Unless it’s specifically stated that the owner will pay for closing, you will need to provide it. Closing costs generally run from 2-5% of the purchase price and includes fees such as:

  • Property tax – New Jersey has the highest property taxes in the nation!
  • Mortgage insurance if you end up putting a down payment of less than 20%
  • Home inspection
  • First-year homeowner’s insurance premium
  • Title search
  • Title insurance
  • Points – prepaid interest on mortgage

It can take up to five years to recover all these costs!

Ongoing Costs

On top of the upfront money you need to spend, you’ll also have to pay a lot on a monthly basis. Sure, your mortgage might be cheap, but once you include everything else, you might end up paying the same if not more as rent on a home. If you’re used to renting, all of the costs you need to pay for may come as a surprise. You probably already pay for electricity, gas, and internet, but if you own your home, you have to also pay for:

  • Water
  • Sewage
  • Trash collection
  • Heating
  • Homeowners Association dues (if applicable)
  • Homeowners Insurance
  • Private Mortgage Insurance – if you paid under 20% with your down payment
  • Property Tax

All of this can add up to hundreds if not thousands of extra dollars that you’ll need to include in your monthly budget. Make sure you have enough money to pay for all of these as well as the basics like food, gas, car insurance, clothes, etc.

Maintenance

You are the owner of your house, which means you are responsible for everything! So if your roof leaks or an appliance breaks down, you will need to figure out how to fix that and pay for it. Living in an older house might seem romantic, until there’s something you need to fix every month. Before you fall in love with a place, ask about upkeep on key items like the roof, boiler, septic tank, etc. Ideally, you’ll want a place with a relatively new roof and appliances as they should last around 5-10 years with yearly check-ups/maintenance. 

And speaking of maintenance, don’t forget you have to maintain your entire property. So if a tree falls down into your neighbors yard, you will need to pay for its removal. If you are part of an HOA you will also have to follow the rules set out including keeping your lawn mowed, having a well-kept house, and, if you have a dog, ensuring you have the appropriate enclosures to prevent your dog from entering your neighbor’s property.

Less Mobility

What might have seemed like a dream house can end up being a nightmare. Maybe you hate your neighbors or perhaps you got a great job opportunity on the other side of the country. Whatever the reason, you need to move quickly. Unfortunately, selling a house can take some time especially if you’re moving during the winter. And while houses have been selling quickly, there’s no guarantee this will last. Plus, a fast-moving market means it will also be harder for you to find a new home without putting down a lot of money. If you know your career requires frequent moves if you just want flexibility, home ownership might not be the best option.

Falling Property Values

Homes are generally an investment and their value continues to grow over the years. But that doesn’t mean that’s always the case. For example, in 2008 property values plummeted due to the housing crisis and those who had to move during this time ended up losing a lot of money as their houses were selling for below the initial purchase price. Ideally, you can ride out the downturn and wait for the market to rebound, but that might not always be the case. Still, buying is generally a safe investment and you should only consider purchasing a place if you plan on living there for a long time.

Move to Your NJ Home

Whether you decide to buy a place or rent, NJ Great Movers can help make your transition seamless. We’ve moved hundreds of people all over New Jersey so we know exactly how to navigate the streets and homes of NJ. If you need professional NJ movers, look no further! We can help with local or long-distance moves and offer full packing services and storage.

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The Best Places to Live in NJ for Gen Z

Best Places to Live in NJ for Gen Z
Best Places to Live in NJ for Gen Z

Being on your own for the first time after college can be both exciting and scary. If you’re still deciding where you want to move to, why not consider New Jersey? Sure, this might be the 5th smallest state based on land area, but it’s also the most densely populated one with close to 9.3 million residents. Plus, depending on where you move you will be a short train ride or drive away from either NYC or Philadelphia. Depending on what city you move to though, you might not even need to venture outside the state as there are plenty of jobs, entertainment, and more at your fingertips.

So if you’re looking for your first apartment, then consider looking in these NJ cities.

One of the Largest Cities is: Jersey City

If you want to enjoy all the trappings of a large city without dealing with millions of people, then Jersey City might be the place for you. Sure, it’s still crowded as it has almost 300,000 residents residing within 21 square miles, but you still have a bit more breathing room when compared to living in Manhattan. Speaking of Manhattan, you’re only a short train ride away so whether you decide to work or play in NYC, you can make the commute in 30 minutes or less via the Path Train or NJ Transit.

Thanks to its proximity to NYC and being a major port of entry for immigration, Jersey City is one of the most ethnically diverse cities in the United States. As such, it’s an amazing place for foodies. You can try cuisines from around the world such as Cuban, Indian, Caribbean, Filipino, and Vietnamese. In fact, Food & Wine declared Jersey City one of America’s next great food cities.

Jersey City offers more than just amazing food; it’s also a great place for job seekers. Many financial firms have opened up locations in Jersey City since the 1980s including Chase, Merrill Lynch, UBS, and Royal Bank of Canada. Because of the high concentration of financial institutions, Jersey City has been given the nickname the Wall Street West. If you’re not interested in working for a large financial company, Jersey City is also home to Colgate-Palmolive and Salesforce. Of course, you can always commute to NYC if you can’t find something you like. You can get easy access to Midtown, the West Village, and Battery Park thanks to the PATH train and NJ Transit buses.

There are plenty of opportunities available in the area and with the lower cost of living and lower income taxes when compared to NYC, you’ll have more money at the end of the month making this one of the best cities in NJ for young professionals. The best part is that the salaries for these financial institutions and other large companies tend to be close to what you would get in NYC. Which means you’re getting a NYC salary without having to worry about NYC rents and other cost of living expenses.

While rents are rising in Jersey City, you can get more for your money so instead of spending $3,000 for a studio apartment, you can get an actual one bedroom complete with a separate living room and kitchen.

Morristown: The Best Place to Find a Soulmate

If you don’t like the fast pace of city life but don’t want to give up on convenience then Morristown might be the perfect place for you. The city only has around 20,000 residents, making it more than 10 times smaller than Jersey City and measures only 3 square miles, making it one of the smallest cities in New Jersey.

Despite its small size, Morristown has plenty to offer. You can hop on the NJ Transit train to go to NYC. Or you can travel to other locations in NJ such as Secaucus or Dover and everything in between. With that said, you don’t need to leave Morristown if you’re looking for things to do. Why not eat at one of the hundreds of restaurants in the area? Or go on a self-guided walking tour to check out the numerous landmarks and historic destinations like Washington’s Headquarters or Jockey Hollow. After that, shop at one of the small retail businesses to support the local economy.

Average rent in Morristown is around $2,600, but that’s for an 800 square foot apartment. Of course, you might be able to find better deals as the price varies greatly depending on unit type. Still, when compared to NYC, you’ll save quite a bit, especially if you opt to have roommates. Plus, you don’t have to spend your saved money on commuting. There are plenty of jobs available in Morristown as it is home to several pharmaceutical companies like Orexo, Bayer, and Vernalis. There are also plenty of small businesses to choose from if you prefer working in a more tight knit organization.

Morristown tends to skew a bit younger with the majority of the population in their 20s and 30s. As such, a large portion of the population is single! In fact, around 60 percent of the population is single. So if you’re looking for your soul mate, Morristown is the perfect place!

Best City for Young Professionals: Hoboken

Don’t be fooled by its small size. Despite its 1.28 square mile size, Hoboken is home to around 60,000 residents making it the 3rd most densely populated city in the United States. However, the city never feels as busy or packed as some streets in NYC, giving it an almost small town vibe, which is helped by homey store fronts and low-rise buildings in the main areas of town.

You have easy access to NYC via the PATH train and can easily get to the West Village or Midtown for work or play. Of course, you don’t need to go into NYC as Hoboken has plenty to offer. Thanks to its growing population and its status as a college town – it’s home to Steven’s Institute of Technology – there’s plenty to do. It has a thriving nightlife scene with more bars per capita than even NYC. If you’re looking for some entertainment, you can find live music almost any night of the week. Or you can walk along the Hudson River Waterfront Walkway and enjoy the spectacular views of the Manhattan skyline.

One fun historical tidbit is that Hoboken is home to modern baseball! On June 19, 1846 Hoboken’s Elysian Fields hosted the very first recorded baseball match that is recognized by modern rules. The game was between The New York Nines and Cartwright’s Knickerbocker squad with the New York Nines winning. While the original Elysian Fields there is a concrete and bronze monument on the intersection between 11th and Washington street to commemorate the baseball field.

Unfortunately, living in Hoboken isn’t cheap so you’ll probably need to live with a couple of roommates in order to afford rent. Still, you’d likely be doing the same thing if you decided to live in NYC, but at least you’ll have more space in Hoboken and save money in other ways! Just make sure you don’t spend all that extra money on the delicious food and drinks!

Highland Park: The Best Place to Live for Gen Z

Highland Park isn’t just one of the best places to live for Gen Z’s, it’s one of the best places to live in NJ, period. With around 15,000 people, this suburb of NYC tends to fly under the radar as it’s not as close to NYC as some of the other locations in this list. It’s definitely more suburban than say Jersey City or Hoboken, so it’s a great option for you if you want to get away from the fast-paced life in a city. Despite being further away from NYC, the town boasts a fairly young demographic with around 37 percent aged 24 to 44. Chances are a lot of graduates from nearby Rutgers University decided to stay in the area!

This historic location is one of the prettiest towns in New Jersey complete with picturesque tree-lined streets, historic homes, and two large parks at either end of town. While you’ll probably want a car to get around, it’s actually quite walkable. Head down to Raritan Avenue to check out the various boutique shops, restaurants, and bars. There’s a weekly farmer’s market and plenty of town events to foster a sense of community. It’s also centrally located so you can easily get to NYC and Philadelphia.

Want to enjoy some nature? Take a stroll along the Raritan River at Donaldson Park in the South or Johnson Park in the Northwest. You can also travel 15-20 minutes outside of town and visit the Rutgers Botanical Garden.

Highland Park has historically been a bedroom community for nearby Rutgers University and Johnson & Johnson in New Brunswick. While there aren’t any major companies in Highland Park itself, New Brunswick boasts several including Bristol-Myers Squibb, RWJBarnabas Health, and more. There are also many small businesses in Highland Park though it might be harder to find a position locally.

Perhaps the biggest draw of Highland Park is its lower cost of living. The average rent price is around $2,000 for an 800 square foot apartment, making it a great option if you want to save some money. More importantly, it’s a location where you can set roots if you want. It has low crime, great schools, and a welcoming community.

Ready to Move to New Jersey?

If you’re thinking about moving to NYC, but can’t figure out how you’ll afford rent, then consider moving to one of these NJ cities. Many of them are close enough to NYC that you can easily commute if you want. At the same time, they also offer plenty of job opportunities and entertainment that you can live, work, and have fun all in the same place.

Once you’re ready to make your move, make sure to call up some professional NJ movers like us. We’ll walk you through it so you know exactly what to expect and we’ll work with your budget. You can give us a call for a free estimate and hopefully, after chatting with our customer service representatives, you’ll understand why we’re the movers NJ residents trust.