Pros and Cons of Buying Land in New Jersey

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Pros and Cons of Buying Land in New Jersey
By

Bart Waldon

Buying land in New Jersey? Before taking the leap, be sure to carefully weigh the pros and cons. There's plenty to love about the Garden State, but some definite drawbacks to keep in mind too.

No doubt, New Jersey has phenomenal perks - beautiful natural scenery, quaint small towns, proximity to major cities like NYC and Philly. For outdoorsy types or commuters, it's an ideal location.

But it's not all beaches and farmland. That picture-perfect landscape comes with a hefty price tag. New Jersey is infamous for its sky-high cost of living. Housing, food, gas - it's all pricier than average here. While wages run higher, for some it's still a stretch.

Beyond everyday expenses, property and state income taxes in Jersey are no joke. You'll keep less of your hard-earned paycheck thanks to rates that can top 10%. Ouch!

Before buying, take time to realistically weigh the advantages against the disadvantages for your situation. New Jersey offers tremendous quality of life perks, but you have to be prepared for the notable costs too. Do your homework to determine if the tradeoffs are worthwhile. With eyes wide open, buying land in the Garden State can absolutely be a smart, rewarding investment. Just know it’s not all roses!

Pros to Buying Land in NJ

Let's start with the many positive factors that attract land buyers to New Jersey. From rolling hills to sandy beaches, it's easy to see why New Jersey property is in high demand.

Convenient Location and Accessibility

One huge advantage of New Jersey is the convenience of its central location between major cities. You can easily get to Philadelphia or New York within just a few hours' drive. Even the renowned Jersey Shore beaches are a quick jaunt away. Major highways like the NJ Turnpike make getting around the state a breeze. For anyone commuting or running a business, the location provides awesome accessibility.

Beyond the urban perks, New Jersey also gives you the best of both country and city living. Head west to explore the rolling farmland and hills of the Highlands region. Go east to chill out along the Jersey Shore's famous sandy beaches and coastal wetlands. Heck, you can even hit the ski slopes atop the Appalachian Mountains for winter recreation. Whether you're craving rural charm or big city action, New Jersey delivers it all within its compact borders. The diverse landscapes and easy accessibility let you choose your own adventure.

A Strong and Stable Local Economy

New Jersey has emerged as a powerhouse for major industries like pharmaceuticals, technology, insurance, and biotech. Corporate heavyweights including Johnson & Johnson, Merck, Prudential, and Panasonic all opted to headquarter in the Garden State. With these big guns leading the economy, New Jersey enjoys enviable job stability across fields. Even when unemployment rises, it stays lower than national levels most of the time.

Having all these diverse titans of industry clustered here provides economic resilience. Despite market ups and downs, New Jersey keeps attracting new facilities and expansions from brand name firms. They want to plant roots where their peers are thriving. This steady corporate growth hints at underlying economic vitality statewide.

For land investors and developers, New Jersey's robust business climate is a plus. Demand for commercial real estate should keep chugging along, thanks to all the companies flourishing here. New Jersey has clearly won over the business community.

Looking ahead, New Jersey seems poised to remain an economic powerhouse. Its strategic location, skilled workforce and business-friendly policies will likely uphold growth. Savvy investors can capitalize on the Garden State's solid economic fundamentals. While cycles occur, the overall trajectory points upward.

Highly Ranked Public School Systems

Education takes center stage in New Jersey, evident by the many school districts consistently topping national rankings. SAT and ACT scores here also outpace averages nationwide. For families relocating, New Jersey's reputation for academic excellence provides reassurance. From cutting-edge preschools to esteemed universities, the schooling options are truly top-tier.

Stellar public schools also directly raise surrounding property values over time. When home shopping, parents prioritize high-performing districts for their children. Cities and towns with standout schools inevitably attract these buyers. Since great schools are in demand, any nearby land also grows more desirable and valuable.

The emphasis on education in New Jersey creates a positive ripple effect. Top-notch schools generate greater community interest, lifting real estate across the board. Savvy investors look for land parcels located in districts with superior test scores and graduation rates. For families or investors, New Jersey's school quality proves a draw.

Agriculture and Farming Potential

Beyond pharma and tech, farming holds an important role in New Jersey's economy. Over 15,000 farms operate across 730,000 acres of prime agricultural land. The state's rich soil, moderate rainfall, and mild climate support diverse crop and livestock production. Everything from blueberries and peaches to nursery plants and herbs thrive here.

For buyers interested in agricultural land, New Jersey offers plenty of opportunity. Farmers' markets provide access to huge metropolitan customer bases. With development squeezing arable land, preserved New Jersey farmland should only become more scarce and in demand. State programs also provide tax incentives to maintain agricultural use of rural land.

Abundant Recreational Amenities

With beaches, mountains, forests, and wetlands, New Jersey natives spend ample time outdoors. Hiking, fishing, boating, swimming, and camping are popular pastimes. Even hunting and wildlife viewing attract enthusiasts to the state's preserved natural areas.

Golf is another favorite sport, with over 50 challenging courses across the landscape. The Jersey Shore alone has more than 40 courses, adding appeal for golf communities and developments. For nature and outdoor recreation fans, owning a piece of New Jersey provides direct access to these amenities right out your back door.

Cons of Buying Land in NJ

Now that we've highlighted the positive attributes, it's also important to be realistic about the downsides. New Jersey certainly has its fair share of challenges that land buyers should carefully consider.

Sky-High Cost of Living

Without a doubt, the cost of living in New Jersey ranks among the highest in the nation. Housing, utilities, food, transportation - residents pay big bucks across the board. As an example, a New Jersey grocery bill runs about 15% above the national average. While wages run higher here, they haven't kept pace with the inflated costs.

Before buying land, crunch the numbers to see if you can afford the ongoing expenses. Property taxes alone are no joke, which leads us to the next point...

Burdensome State and Local Tax Rates

In addition to expensive real estate, New Jersey levies some of the steepest income and property taxes around. The state income tax ranges from 1.4% up to 10.75%, applying to both individuals and businesses. Meanwhile, average property tax rates approach 2.13%, the highest nationwide. Ouch!

While taxes provide funding for local services, they also cut into disposable income for homeowners and businesses. Some buyers may find the tax burden difficult depending on their financial situation and income sources.

Troubling State Budget and Debt Crisis

Financial woes continue to plague state government, with New Jersey struggling under massive debt. Unfunded pensions and mismanaged budgets resulted in a major deficit. As of 2022, the per capita state debt stood at around $67,615 per person. That's a lot of IOUs to pay back!

Unfortunately, years of fiscal missteps have consequences. Credit downgrades make borrowing more expensive, slowing improvements. Education, infrastructure, and services remain underfunded. For prospective land buyers, the shaky financials and risk of future tax hikes are cause for worry.

Congestion Problems Around Urban Centers

Make no mistake, New Jersey is a crowded state! While it has rural pockets, the northern part of the state packs in population density near NYC. Urban centers including Newark, Jersey City, Paterson, Elizabeth and others offer little breathing room.

With congestion comes traffic, commuting headaches, parking shortages, noisy neighborhoods, and loss of green space. If you crave open room to roam, the hustle and bustle around NJ cities may disappoint. Check the area carefully to ensure your property provides the serene escape you desire.

Complex Regulations and Red Tape

Development in New Jersey faces ample regulations, zoning codes, and paperwork burdens. Approvals often proceed slowly, frustrating buyers eager to start building. You may need legal help navigating the bureaucratic system. Also factor in the costs of inspections, permits, environmental studies and more.

While the rules aim to improve quality and safety, they do add hoops to jump through. Make sure you understand the approval process and secure all required documentation before purchasing land for structures or renovations.

Key Considerations Before Buying NJ Land

When weighing the decision to buy land in New Jersey, keep these key considerations top of mind:

  • How do you plan to use the property – residential, farming, commercial development? Make sure the land is zoned for your intended purpose and meets terrain needs like access and gradient.
  • Do thorough research on preferred locations. Study particular counties and towns to find areas that fit your lifestyle. Account for things like commute times and proximity to amenities.
  • Crunch the numbers beyond just the purchase price. Factor in long-term costs like property taxes, maintenance, and build-out expenses. Make sure total costs align with your budget and capabilities.
  • Review recent sales of comparable land parcels in the immediate vicinity. This helps gauge current value and resale potential so you don’t overpay.
  • Confirm availability of key utilities like electric, water and sewer lines. Check that they service the area and can connect to the property if needed.

Carefully weighing each of these factors will inform your decision about purchasing land in New Jersey. No doubt the Garden State offers outstanding locations and benefits. But you must also prepare for substantial costs that come with it. With eyes wide open and proper diligence, investing in New Jersey land can prove a smart move for the future. Do your homework to determine if the pros outweigh the cons for your needs.

Should You Invest in New Jersey Land in 2023?

What Makes New Jersey Land Appealing

New Jersey offers plenty of upside for land buyers in 2023. The state provides great accessibility between major East Coast cities. Diverse geography, from shorelines to farmland, gives broad investor appeal. Post-COVID economic rebounds, strong jobs, and high-ranked schools also attract buyers to the Garden State. With high demand plus development potential, New Jersey land can be a lucrative investment play.

But Mind the Pitfalls Too

However, some challenges exist when buying New Jersey land. The state is known for steep taxes that eat into profits. Dense zoning and regulations can also increase costs for rentals, developments or farms. And after a hot pandemic rebound, the overall market shows signs of slowing in 2023.

Tips for Smart Investing

Do thorough research to find well-priced land in high-growth zones with attractive sales comps. Target parcels near amenities with strong demographics for income potential. Mixed-use, multifamily or commercial sites offer flexibility. And consult local codes before purchasing, as zoning laws impact options.

2023 Outlook

With proper diligence, New Jersey land can still produce stable returns in 2023. But investors need realistic expectations, as rising rates and inflationary pressures cool demand. For longer-term buyers able to weather a near-term cooldown, the state remains appealing. New Jersey land still hedges well against inflation over time.

Final Thoughts

Despite some headwinds, New Jersey remains a compelling place to purchase land from an investment standpoint. The state offers inherent advantages like location, strong demographics, and development potential. While the market may see some slowing in 2023, real estate in desirable areas of New Jersey can still produce profitable returns over the long-term. Savvy investors who do their homework should be able to capitalize on opportunities. With proper research, realistic expectations, and strategic buying, land in the Garden State can blossom into a fruitful investment for years to come.

Frequently Asked Questions (FAQs)

What types of land offer the best investment potential in New Jersey?

Land for residential developments, multifamily housing, mixed-use projects, and commercial buildings tend to provide strong returns. Agricultural land can work for long-term holds or farm businesses. Proximity to amenities boosts desirability and values over time.

What mistakes should real estate investors avoid when buying NJ land?

Paying too much based on emotion rather than comparables, failing to research zoning/permitting, and lack of inspection for contamination or other issues. Also, not budgeting for long-term costs like taxes and maintenance post-purchase.

How can investors find good deals on land in New Jersey?

Looking for distressed sales, heirs selling inherited land, or owners facing financial pressure to sell quickly. Establishing relationships with local real estate agents and developers can lead to off-market opportunities.

Should I focus on New Jersey land in urban or rural areas?

It depends on your investment goals. Urban land offers more potential for dense development but costs more. Rural areas provide lower entry pricing but fewer services and less access. Evaluate options carefully.

Is financing readily available for raw land purchases in New Jersey?

Financing can be riskier for vacant land, so solid credit and income are key. Look for lenders familiar with real estate development. Bringing substantial capital can help unlock loan options.

About The Author

Bart Waldon

Bart, co-founder of Land Boss with wife Dallas Waldon, boasts over half a decade in real estate. With 100+ successful land transactions nationwide, his expertise and hands-on approach solidify Land Boss as a leading player in land investment.

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