Best Places To Buy Rental Property In New Jersey For 2025

If there’s one thing every real estate investor dreams of, it’s passive income. Rental properties are the crown jewel of real estate investing because they allow you to generate monthly cash flow while your property appreciates in value. But not all rental markets are created equal—some offer significantly better returns than others. That’s why finding the best places to buy rental property in New Jersey can make all the difference in maximizing cash flow and long-term wealth.

New Jersey’s diverse economy, strong rental demand, and high-income tenant base make it an incredible state for real estate investors. Whether you’re looking for long-term rentals, short-term Airbnb properties, or buy-and-hold investments, this state offers a variety of opportunities. In this guide, we’ll break down the top rental markets in New Jersey, exploring where to invest for the best returns and why these cities stand out in the New Jersey real estate investment market. Let’s dive in to the following:

• Why New Jersey Is One of The Best Places To Buy Rental Property
• Top 15 Best Places To Buy Rental Property In New Jersey
• The Best Places To Buy Rental Property In New Jersey: FAQ

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Read Also: How To Buy A Rental Property With No Money

Why New Jersey Is One of The Best Places To Buy Rental Property

New Jersey might not be the first place that comes to mind when you think of real estate investing, but it should be. This small but mighty state packs a serious punch when it comes to rental property investment opportunities. With its prime location between major economic powerhouses like New York City and Philadelphia, a strong job market, high rental demand, and limited housing inventory, New Jersey is an investor’s dream.

For those looking to build passive income through rental properties, the New Jersey real estate investment market offers diverse opportunities—from high-end rental properties in affluent suburbs to affordable multifamily units in up-and-coming cities. The state is also landlord-friendly, making it easier to manage tenants and maximize returns.

Here’s why New Jersey stands out as one of the best places to buy rental property in New Jersey:

• Prime Location Between NYC & Philadelphia: The state’s proximity to two of the largest metro areas in the U.S. creates a steady demand for rental housing from commuters, professionals, and students.
• High Rental Demand & Strong Tenant Base: With a homeownership rate below the national average, many New Jersey residents rely on rental properties, ensuring consistent demand.
• Rising Home Values & Strong Appreciation Potential: New Jersey’s real estate market continues to grow, making rental properties a smart long-term investment.
• Tourism & Short-Term Rental Potential: With popular destinations like the Jersey Shore, Atlantic City, and historic towns, investors can capitalize on profitable short-term rentals.

New Jersey offers something for every type of investor, whether you're focused on cash flow, appreciation, or short-term rental income. Now, let’s dive into the best cities in New Jersey for rental property investment!

Prime Location Between NYC & Philadelphia

One of the biggest advantages of investing in New Jersey rental properties is the state’s strategic location between two of the most powerful metropolitan areas in the country: New York City and Philadelphia. With millions of people commuting daily for work, school, and business, rental demand remains consistently high. This prime location makes New Jersey one of the best places to buy rental property in New Jersey, offering investors a steady stream of tenants looking for affordability and convenience.

New Jersey’s excellent transportation infrastructure is a game-changer for rental property owners. With multiple NJ Transit train lines, buses, PATH trains, and easy access to major highways like the NJ Turnpike and Garden State Parkway, tenants can commute seamlessly into NYC or Philadelphia while paying significantly less in rent than they would in the city. Towns like Jersey City, Hoboken, and Newark have become renter hotspots, attracting professionals who work in Manhattan but prefer New Jersey’s more affordable housing options.

The average commute time for New Jersey residents is about 30 minutes, one of the longest in the country, highlighting just how many people choose to live in the state while working in urban centers. This strong tenant base ensures that rental properties in New Jersey remain in high demand, with investors seeing consistent cash flow and low vacancy rates.

While rents in Manhattan and Center City Philadelphia have skyrocketed, New Jersey remains a more affordable option for both tenants and investors. The median home price in New Jersey is significantly lower than in NYC, allowing investors to purchase rental properties at a lower entry cost while still charging competitive rents. This affordability, coupled with high rental demand, makes New Jersey a prime location for investors seeking high cash-on-cash returns and long-term appreciation.

Beyond traditional long-term rentals, investors can also capitalize on short-term rental demand from commuters, business travelers, and students. Cities like Jersey City and Hoboken are prime markets for Airbnb and corporate rentals, as they offer an attractive alternative to expensive NYC hotel stays. Meanwhile, in South Jersey, towns like Camden and Cherry Hill attract renters working in Philadelphia who are looking for larger living spaces at lower costs.

As remote work grows in popularity, more professionals are choosing to live in New Jersey while working flexibly between NYC, Philly, and home. This shift is further increasing rental demand, particularly in commuter-friendly suburbs. As home prices in New York City and Philadelphia remain prohibitively high, more renters are expected to look toward New Jersey, strengthening its status as one of the best places to invest in rental property in New Jersey for years to come.

For investors looking to secure steady rental income, strong appreciation, and high tenant demand, New Jersey’s unbeatable location makes it a top-tier real estate market.

High Rental Demand & Strong Tenant Base

One of the biggest advantages of owning rental property in New Jersey is the consistent demand for rental housing. With a mix of urban professionals, commuters, students, and young families, the Garden State boasts a strong and diverse tenant base, ensuring low vacancy rates and steady cash flow for landlords. If you're looking for one of the best places to buy rental property in New Jersey, the state's high percentage of renters and stable employment market make it an ideal investment destination.

New Jersey has one of the highest renter populations in the country, especially in urban hubs like Jersey City, Newark, and Camden. According to the U.S. Census Bureau, 36.1% of New Jersey residents rent their homes, which is significantly higher than the national average of 34.4%. In major cities like Newark and Jersey City, the renter percentage jumps to over 70%, creating endless opportunities for landlords to find reliable tenants.

A low vacancy rate is one of the best indicators of strong rental demand, and New Jersey consistently performs well in this area. As of 2023, the state’s residential rental vacancy rate is around 3.1%, significantly lower than the national average of 6.1%. In high-demand areas like Hoboken, Edison, and New Brunswick, the vacancy rate is even lower, making it one of the best states for landlords looking for long-term rental income stability.

New Jersey is also home to some of the most prestigious colleges and universities, including Princeton University, Rutgers University, and Seton Hall. College towns like New Brunswick, Princeton, and Camden have built-in tenant demand, offering investors high occupancy rates and steady rental income. Many students prefer to rent off-campus housing, creating an ideal market for single-family homes, duplexes, and multi-unit properties.

New Jersey's strong job market, population growth, and high cost of homeownership ensure that rental demand will remain steady for years to come. With mortgage rates making homeownership less attainable for many, more people are choosing to rent longer, increasing demand for single-family homes, condos, and multifamily properties.

For investors looking for high rental demand, low vacancy rates, and a diverse tenant pool, New Jersey is one of the best states to invest in rental property. Whether you’re targeting urban professionals, students, or commuters, New Jersey offers strong cash flow potential and long-term appreciation for rental property owners.

 Rising Home Values & Strong Appreciation Potential

​Investing in New Jersey's rental property market offers significant appreciation potential, making it one of the best places to buy rental property in New Jersey. The state's housing market has experienced notable growth, providing investors with opportunities for substantial returns.​

The average home value in New Jersey is approximately $540,658, reflecting a 7.7% increase over the past year. This upward trend indicates a robust real estate market, benefiting property owners through increased equity.​

Several New Jersey cities have seen remarkable home value appreciation:​

• Jersey City: The average home value is $620,826, up 6.7% over the past year. ​
• Paterson: Home values average $498,059, with a significant 9.2% increase in the past year. ​
• Piscataway: The average home value stands at $551,515, reflecting a 10.8% rise over the past year. ​

These figures highlight the strong appreciation potential in various New Jersey markets, making them attractive for investors seeking long-term growth.​

In addition to property appreciation, New Jersey offers lucrative rental income opportunities:​

• Statewide Average Rent: The average rent for an apartment is $2,337, with variations depending on location and property size. ​
• Jersey City: Average rents are approximately $3,100 per month, significantly higher than the national average, indicating strong demand. ​

This combination of rising home values and substantial rental income potential positions New Jersey as one of the best areas in New Jersey to buy investment property.​

New Jersey's consistent home value appreciation and robust rental market make it an ideal environment for rental property investors. The state's diverse cities offer unique opportunities for growth and income, reinforcing its status as one of the best places to buy rental property in New Jersey.

Tourism & Short-Term Rental Potential

New Jersey’s tourism industry is a powerhouse, attracting millions of visitors annually, making it one of the best places to buy short-term rentals. From the sandy shores of the Jersey Shore to the casinos of Atlantic City, the state provides ample opportunities for investors looking to profit from Airbnb and vacation rentals. In 2023 alone, New Jersey welcomed 116 million visitors, generating $73 billion in tourism revenue.

Certain areas stand out as hotspots for short-term rental success:

• Atlantic City: Tourists flock to the city year-round for its casinos, nightlife, and boardwalk, with short-term rentals earning $250–$400 per night in peak seasons.
• Cape May: As a premier beach destination, Cape May rentals can charge $300+ per night during the summer months.
• Jersey City: With its proximity to NYC, Jersey City attracts business and leisure travelers, with Airbnb hosts earning $4,000+ per month on average.

Investors looking for the best areas in New Jersey to buy investment property for short-term rentals should focus on tourism-heavy locations where demand remains high. With New Jersey’s lenient short-term rental laws in many areas and year-round visitor appeal, rental property owners have ample opportunities to generate substantial income.

Read Also: How To Buy Your First Rental Property: A Step By Step Guide

Top 15 Best Places To Buy Rental Property In New Jersey

Now that we’ve covered why New Jersey is one of the best places to buy rental property, let’s take a closer look at the top markets where investors are seeing strong returns. Whether you’re looking for long-term rental cash flow, short-term vacation rental potential, or properties primed for appreciation, New Jersey has plenty of opportunities.

The New Jersey rental property market is incredibly diverse, spanning urban hubs, commuter-friendly suburbs, and coastal vacation hotspots. With home values rising and demand for rentals increasing, investing in the right city can make all the difference in maximizing ROI and securing consistent rental income. While some cities offer affordable entry points and high rental yields, others thrive on their proximity to New York City and Philadelphia, making them attractive for commuters and professionals.

Below are the best places to invest in rental property in New Jersey, each offering unique benefits for real estate investors:

1. Jersey City: A prime market for commuters and professionals working in NYC.
2. Newark: Affordable entry prices and strong rental demand driven by jobs.
3. Atlantic City: A short-term rental hotspot thanks to its year-round tourism and casinos.
4. Trenton: Government jobs and affordable home prices make it a solid market.
5. Paterson: High population density and proximity to NYC create strong demand.
6. Elizabeth: Offers a balance of affordability and rental demand due to its location.
7. Hoboken: A high-end rental market with strong appreciation and steady demand.
8. Camden: Low home prices create opportunities for high cash flow rentals.
9. Clifton: Suburban appeal with excellent public transit access to NYC.
10. Edison: A growing job market and strong rental demand make this a prime location.
11. Cherry Hill: A desirable suburban market with solid appreciation potential.
12. Toms River: A coastal town with vacation rental and year-round rental demand.
13. Vineland: Affordable home prices and strong rental yield potential.
14. Bayonne: A fast-growing market with new development projects increasing demand.
15. Passaic: High rental occupancy and appreciation potential.

Jersey City, NJ

Jersey City is a prime location for rental property investors looking for strong tenant demand and appreciation potential. As the closest New Jersey city to Manhattan, it offers an attractive alternative to NYC living while still providing easy access to Wall Street, tech jobs, and major employers. The best places to buy rental property in New Jersey are often those with a strong commuter base, and Jersey City checks all the boxes. Its rapidly expanding waterfront district, cultural hotspots, and continuous influx of professionals ensure a steady demand for rentals. Multi-family properties and luxury high-rises are particularly lucrative here, especially for investors looking to benefit from long-term appreciation.

Newark, NJ

Newark is a high-demand rental market with an expanding economy and proximity to both NYC and major transportation hubs. As home to Newark Liberty International Airport and several Fortune 500 companies, the city has a strong workforce that needs housing. Investors looking for New Jersey rental property investment opportunities will appreciate the city’s mix of affordable row homes, multi-unit properties, and new developments, all catering to a diverse tenant base. With various revitalization projects underway, Newark presents an opportunity to invest in a market that is steadily improving while still offering relatively affordable entry points.

Atlantic City, NJ

For investors interested in short-term rental potential, Atlantic City is a goldmine. With its bustling boardwalk, casinos, and entertainment venues, the city sees a continuous stream of tourists and convention-goers looking for accommodations. The New Jersey real estate investment market benefits from this steady influx of visitors, making Airbnb and vacation rentals particularly profitable here. Waterfront condos and beachside properties tend to perform best, allowing investors to capitalize on seasonal demand while also appealing to year-round renters working in the hospitality industry.

Trenton, NJ

As the capital of New Jersey, Trenton provides a unique investment opportunity with a stable job market driven by government positions, healthcare, and education. The city has an affordable housing market compared to other parts of the state, making it one of the best places to buy rental property in New Jersey for those looking for lower upfront costs with strong rental yields. Single-family homes and small multi-family units tend to do well here, especially for long-term investors who want steady, reliable rental income. With ongoing redevelopment efforts, Trenton’s rental market continues to evolve, making it an attractive option for investors willing to play the long game.

Paterson, NJ

Paterson is a city on the rise, known for its rich history, cultural diversity, and growing economy. The city’s rental market is fueled by a high percentage of renters, making it one of the best cities in New Jersey for passive real estate income. Investors can find a mix of older multi-family properties and new developments, both of which can generate strong cash flow. With its location near major highways and transportation to NYC, Paterson continues to attract tenants looking for affordability without sacrificing convenience. As the city invests in infrastructure and community development, rental demand is expected to remain strong, offering long-term benefits for investors.

Elizabeth, NJ

Elizabeth is one of the best areas in New Jersey to buy investment property, thanks to its central location and strong workforce demand. With major employers like Port Newark, Newark Liberty International Airport, and industrial hubs fueling job growth, rental demand remains steady. The city’s affordability compared to nearby Newark and Jersey City makes it an attractive option for tenants and investors alike. Multi-family properties are particularly strong investments here, as they provide consistent rental income while benefiting from future appreciation as the city continues to develop.

Hoboken, NJ

Hoboken is one of the best places in New Jersey for rental income properties, offering an unbeatable combination of location, demand, and appreciation potential. With its picturesque waterfront, vibrant nightlife, and direct access to Manhattan via PATH trains and ferries, Hoboken attracts a high-income tenant base. Rental properties here, particularly luxury apartments and condos, can command premium prices, making them ideal for investors looking to maximize cash flow and appreciation. Short-term rentals and high-end multifamily units are the most profitable strategies in this dynamic market.

Camden, NJ

Camden is undergoing a major revitalization, making it a compelling choice for investors seeking New Jersey rental property investment opportunities in an emerging market. With significant investments in infrastructure, education, and business development, the city is transforming its rental landscape. Affordable home prices provide investors with high cash flow potential, especially in multi-family properties. As Camden continues to attract new businesses and residents, rental demand is expected to grow, offering long-term appreciation and income opportunities.

Clifton, NJ

Clifton is one of the best places to buy rental property in New Jersey thanks to its prime location, diverse housing market, and strong demand from commuters. Situated just 10 miles from Manhattan, Clifton provides easy access to New York City via major highways and NJ Transit, making it an attractive choice for renters who work in the city but prefer suburban living.

Multi-family properties and single-family homes converted into rentals are excellent investment choices, as demand remains steady from young professionals, families, and long-term tenants. Clifton’s mix of urban convenience and suburban charm has led to increasing property values, making it one of the best New Jersey cities for rental property appreciation. Investors looking for cash flow will find strong rental yields, while those seeking appreciation can benefit from the area's continued growth. With a thriving local economy and top-rated schools, Clifton is a well-rounded market for both short- and long-term rental strategies.

Edison, NJ

Edison is a prime location for investors looking for New Jersey real estate investment opportunities due to its strong economy and diverse housing options. The town is home to a thriving job market, great schools, and a high quality of life, making it a magnet for long-term renters. Rental properties in Edison cater to both professionals and families who prefer suburban living with easy access to NYC and major employment hubs. Single-family homes and townhouses are ideal investments, offering reliable tenants and increasing property values over time.

Cherry Hill, NJ

Cherry Hill offers investors the perfect blend of suburban stability and rental demand, making it one of the best New Jersey cities for real estate appreciation. Located just outside of Philadelphia, Cherry Hill attracts renters looking for a quieter lifestyle while staying close to job opportunities. The town boasts excellent schools, shopping centers, and recreational options, which keep rental demand high. Investors looking for long-term buy-and-hold opportunities will find single-family homes and townhouses to be solid choices, with steady appreciation and tenant retention over time.

Toms River, NJ

Toms River is one of the best places to buy rental property in New Jersey for investors looking to capitalize on both long-term rentals and vacation properties. As one of the most popular shore towns in the state, Toms River attracts renters who want to live near the coast without paying premium prices in areas like Point Pleasant or Seaside Heights. The town’s strong job market and suburban feel make it attractive for families and retirees, ensuring steady rental demand year-round. With property values steadily increasing, Toms River is also one of the best New Jersey cities for real estate appreciation, offering investors strong long-term returns.

Vineland, NJ

Vineland is an affordable yet promising market for investors seeking New Jersey rental property investment opportunities. As one of the more affordable areas in the state, Vineland offers lower property prices compared to northern New Jersey, allowing investors to secure high cash flow with lower upfront costs. The area has a growing job market in industries like agriculture and manufacturing, making it an ideal place for workforce housing investments. With steady rental demand and a lower cost of entry, Vineland provides an excellent opportunity for investors looking for high rental yields in New Jersey.

Bayonne, NJ

Bayonne has transformed into a highly desirable rental market thanks to its close proximity to New York City and major redevelopment projects. Investors targeting buy-and-hold real estate in New Jersey can benefit from Bayonne’s strong rental demand, as more people seek an affordable alternative to living in Manhattan. With new waterfront developments, retail expansion, and improved public transportation options, Bayonne is experiencing significant growth. The city’s mix of multi-family homes and luxury apartments makes it a great market for both cash-flowing rentals and long-term appreciation. As rental demand continues to rise, Bayonne remains one of the best places in New Jersey for passive rental income.

Passaic, NJ

Passaic is a densely populated city that remains one of the best rental markets in New Jersey due to its affordability and proximity to major employment hubs. With easy access to NYC and neighboring cities like Newark and Paterson, Passaic attracts a mix of commuters, families, and young professionals. Investors will find that multi-family properties perform particularly well in this market, generating strong cash flow and tenant demand. Additionally, Passaic’s diverse economy and ongoing urban revitalization projects make it a smart choice for investors looking for high-demand rental properties in New Jersey.

Read Also: Best Places To Buy Rental Property In 2025 For Investors

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The Best Places To Buy Rental Property In New Jersey: FAQ

Investing in rental property in New Jersey can be a smart move, but it’s essential to know the best locations, market trends, and investment strategies. Below are some of the most frequently asked questions to help you make informed decisions when purchasing rental property in the state.

What are the best places to buy rental property in New Jersey?

The best places to buy rental property in New Jersey include Newark, Jersey City, Paterson, Elizabeth, and Trenton due to their strong rental demand, job markets, and affordability. Coastal cities like Atlantic City and Toms River offer excellent short-term rental opportunities, while suburban areas such as Edison and Clifton provide steady long-term rental income.

Is New Jersey a good state for rental property investment?

Yes, New Jersey is an excellent state for rental property investment due to its high rental demand, rising home values, and proximity to NYC and Philadelphia. Investors can benefit from strong appreciation potential, a diverse tenant base, and a mix of urban and suburban markets that cater to different investment strategies.

Where can I find affordable investment properties in New Jersey?

Cities like Vineland, Camden, and Trenton offer some of the most affordable investment properties in New Jersey, allowing investors to generate strong rental yields with a lower initial investment. These cities provide a balance of affordability and steady rental demand, making them attractive for new and seasoned investors alike.

What are the benefits of investing in New Jersey’s short-term rental market?

New Jersey’s coastal towns, casino destinations, and proximity to NYC make it a prime location for short-term rentals. Atlantic City, Cape May, and Wildwood offer excellent opportunities for Airbnb and vacation rental investors, thanks to strong tourist demand and seasonal rental spikes.

How much rental income can I expect from properties in New Jersey?

Rental income in New Jersey varies by location, but major cities like Jersey City, Newark, and Hoboken see average monthly rents exceeding $2,000. Suburban areas like Edison and Clifton provide slightly lower rents but offer high occupancy rates and stable tenants. Investors should research rental comps in their target market to estimate potential income.

Are property taxes high in New Jersey, and how does that affect rental investments?

New Jersey has some of the highest property taxes in the U.S., but investors can offset costs through high rental prices and strong demand. Targeting areas with solid appreciation potential, such as Bayonne or Jersey City, can help maximize returns despite property tax expenses.

What type of rental properties perform best in New Jersey?

Multi-family homes, townhouses, and condos tend to perform well in high-demand rental markets like Newark, Jersey City, and Paterson. In suburban areas, single-family homes attract long-term tenants, while coastal properties and city apartments work well for short-term rental strategies.

How can I finance a rental property in New Jersey?

Investors can finance rental properties in New Jersey through conventional loans, FHA loans (for owner-occupied multi-units), DSCR loans, or private lending options. Many investors also explore creative financing strategies, such as seller financing or partnerships, to enter the market with less upfront capital.

What are the most landlord-friendly cities in New Jersey?

New Jersey has tenant-friendly laws, but cities like Toms River, Vineland, and Clifton tend to be more landlord-friendly with fewer restrictions on rent increases and evictions. Investors should familiarize themselves with local regulations to ensure compliance and protect their rental income.

Is investing in New Jersey rental property a good idea in 2025?

Yes, with high rental demand, rising home values, and proximity to major economic hubs, investing in rental property in New Jersey in 2025 remains a strong opportunity. Investors who target the right markets with high appreciation and stable cash flow can build long-term wealth in the state’s evolving real estate landscape.

Final Thoughts On The Best Places To Buy Rental Property In New Jersey

If you’re looking for a state where rental property investing just makes sense, New Jersey checks all the boxes. With its unbeatable location between NYC and Philly, high rental demand, and strong appreciation potential, the best places to buy rental property in New Jersey offer a mix of long-term stability and short-term profit potential. Whether you’re eyeing urban hotspots, suburban retreats, or beachside vacation rentals, there’s an opportunity waiting. Don’t sit on the sidelines—New Jersey’s rental market is thriving, and the time to invest is now!

Ready to Take the Next Step in Real Estate Investing? Join our FREE live webinar and discover the proven strategies to build lasting wealth through real estate.

Whether you're just getting started or ready to scale, we'll show you how to take action today. Don't miss this opportunity to learn the insider tips and tools that have helped thousands of investors succeed! Seats are limited—Reserve Your Spot Now!

*Disclosure: Real Estate Skills is not a law firm, and the information contained here does not constitute legal advice. You should consult with an attorney before making any legal conclusions. The information presented here is educational in nature. All investments involve risks, and the past performance of an investment, industry, sector, and/or market does not guarantee future returns or results. Investors are responsible for any investment decision they make. Such decisions should be based on an evaluation of their financial situation, investment objectives, risk tolerance, and liquidity needs.