Real Stories

Manahawkin Couple Sees Opportunities in Current Market

John, a Stafford Township property owner on the brink of retirement, once heard a speaker accurately describe wealth and it has stuck with him to this day. "The difference between being rich and being wealthy is that when you are rich you have money, however being wealthy, your money makes more money for you." This buyer's unique perception of the real estate market has helped him and his wife, Helen, close their fourth investment property to date. Recently, they shared with us their buying and selling experience in Manahawkin.

Despite current speculation, the couple believes that many opportunities exist in the New Jersey real estate market. "This is a perfect market to purchase an investment property," John said. "There are some really good opportunities out there right now."

The couple used the 1031 property exchange process to help them meet their goals in the current market. Through the 1031 exchange, they were able to put off paying capital gains in order to effectively use the money they earned from selling to purchase their next property.

As a cost analysis expert, John understands the importance of investing and the necessity of generating a solid return on investment (ROI). "What you get back in positive cash flow plus payments toward principle, and any increase in equity or value of the house is your return on investment," he said. "In addition you also have certain write-offs such as depreciation, and tax advantages that further add to your return on investment."

The couple's REALTOR® played an intricate role in their success with the 1031 exchange. "Using our REALTOR® as an agent was a great asset due to her in-depth knowledge of how 1031 exchanges work," John said. "We identified the size and type of house we were looking for in advance of the actual sale of our one investment property. We were able to close on the property we were selling and close on the property we were purchasing within the same week."

As someone who has a personal interest in the Stafford Township area as councilman, John likes the idea of investing in his community. "Finding homes that needed some work (mostly cosmetic) allowed us to buy homes at a low price, put in improvements that significantly increased the value of the house." he said. "Improving these homes has improved our communities and neighborhoods."

When it comes to reports on the current market, the couple believes the media should consider location. "The media is reporting the housing market on a national level. Each geographic area is different," John said. "Also, keep in mind that although home values have come down recently, if you take a longer term look, and go back five, ten or more years you still did quite well. You need to recognize real estate as a long term investment."

The couple has several friends who remain nervous about the market. However, the couple believes many are missing out. "If the property is in a desirable place to live the house will hold or only have a slight decrease in value, and may even slightly increase its value even in a depressed market. Too many people don't look at this as an opportunity to buy low, and they miss the opportunity," John said. "I have friends who ask me if I am sorry I invested so much in the real estate market now that it is dropping. I remind them that my properties are still worth much more than what I paid for them, they still give me a monthly income, and I actually have a limited amount of my own money invested."

Whether buying or selling a home, the couple feels the best part of homeownership is owning real property. "With real estate I only pay a one time fee when I sell," John said. "Having control of your own money and tax advantages are the primary benefits to homeownership."