Thinking about buying a single-family rental in Beachwood and wondering what the cap rate might look like after taxes, insurance, and vacancy? You are not alone. New Jersey’s property taxes and coastal insurance can shift your numbers fast, so a clear, local framework matters. In this guide, you will learn how to estimate cap rates, what costs to include, and where to pull reliable Beachwood rental comps. Let’s dive in.
Why Beachwood attracts rental demand
Beachwood sits in Ocean County near the Jersey Shore, which gives you a mix of year-round renters and people drawn to coastal proximity. Commuting routes into Ocean and Monmouth County job centers also support steady demand. Seasonal patterns can influence vacancy and pricing, so it helps to budget conservatively and validate rents with multiple data sources.
Where to get Beachwood rent and price data
If you want accurate numbers, use several sources and compare them.
- HUD’s Fair Market Rents for Ocean County can help you set a realistic rent ceiling when budgeting early. See the latest on the HUD Fair Market Rents page.
- The U.S. Census American Community Survey offers median gross rent and housing characteristics at the borough level. Start with the U.S. Census American Community Survey.
- Rentometer provides quick neighborhood rent checks and batch reports. Use Rentometer neighborhood rent comparisons to spot-check your range.
- Zillow ZORI and active rental listings are useful for trend signals, and Realtor.com and the local MLS are best for verified comps. Do not rely on a single listing or a seasonal rate. Compare 3 to 6 similar properties.
- Ocean County assessor records show actual tax bills. Always pull the latest bill for the exact parcel you are analyzing.
Note: New Jersey has one of the highest property tax burdens in the country, which often makes taxes your largest line item. Review the Tax Foundation’s research on state property taxes when comparing markets.
Cap rate basics for Beachwood rentals
Cap rate is a quick way to compare properties without including your mortgage. It is the return on the asset itself.
- Cap rate = Net Operating Income divided by Purchase Price.
- Net Operating Income (NOI) = Gross Scheduled Rent minus Vacancy and Operating Expenses.
- Do not include mortgage payments in NOI. You will use those later for cash-on-cash returns.
Use cap rate to compare Beachwood to nearby towns or other asset types. A higher cap rate can signal higher risk or more management work. In high-tax coastal New Jersey, cap rates often compress compared to lower-tax markets.
Your cap rate worksheet template
Copy this into a spreadsheet so you can update assumptions quickly.
Inputs:
- Market monthly rent
- Number of units (1 for SFR)
- Annual gross scheduled rent = monthly rent × 12
- Vacancy percent
- Property tax (from current tax bill)
- Insurance (landlord policy, plus flood if needed)
- Owner-paid utilities
- Maintenance and repairs
- Capital expenditures reserve
- Management fee percent or dollar amount
- Other operating costs (licenses, HOA, legal, accounting)
Calculations:
- Vacancy loss = gross scheduled rent × vacancy percent
- Effective gross income = gross scheduled rent minus vacancy loss
- Total operating expenses = sum of taxes, insurance, utilities, maintenance, CapEx, management, other
- NOI = effective gross income minus total operating expenses
- Cap rate = NOI divided by purchase price
Optional financing metrics:
- Cash-on-cash return = (NOI minus annual debt service) divided by cash invested
- Run best, base, and worst cases by changing rent, vacancy, and expenses
Sample cap-rate math (illustrative only)
Here is a simple example to show the math. Replace these with Beachwood-specific numbers from your comps and tax bill.
- List price: $420,000
- Target rent: $2,600 per month
- Annual gross rent: $31,200
- Vacancy at 6 percent: $1,872
- Effective gross income: $29,328
- Expenses: property tax $7,200, insurance $1,200, maintenance $2,500, CapEx $1,500, management 10 percent $2,932.80, utilities/other $600
- Total operating expenses: about $16,435
- NOI: $29,328 minus $16,435 = $12,893
- Cap rate: $12,893 divided by $420,000 = 3.07 percent
Interpretation: A cap rate near 3 percent is common for some high-tax coastal suburbs. If you improve either the price or the income, the cap rate changes. For example, if the purchase price were $300,000 with the same NOI, the cap rate would be about 4.30 percent.
Operating costs to include
Build your budget from the ground up. Use actual quotes where possible.
- Vacancy and credit loss: 4 to 10 percent of gross rent. Use the higher end if you expect seasonality or more turnover.
- Property taxes: Often the largest expense in New Jersey. In many towns, taxes can equal 15 to 35 percent of gross rent. Always verify with the current Ocean County tax bill for the specific property.
- Insurance: Landlord policy plus liability. Budget 2 to 6 percent of gross rent. If your property is in a flood zone, add a separate flood policy that can add hundreds to thousands per year.
- Utilities (owner-paid): Water, sewer, trash, or any gas and electric you include. Plan for 1 to 5 percent of gross rent depending on what you cover.
- Maintenance and repairs: Routine items, landscaping, appliances, and HVAC service. Budget 5 to 10 percent of gross rent. Older homes often require more.
- Capital expenditures (CapEx) reserve: Roof, HVAC, siding, and major systems. Budget 5 to 10 percent of gross rent, or $500 to $2,000 per year depending on age and condition.
- Property management: If you hire a manager, plan for 8 to 12 percent of collected rent, plus a tenant placement fee. If you self-manage, account for your time and leasing costs.
- Licenses, legal, accounting, HOA: Plan 1 to 3 percent of gross rent or $200 to $1,000 per year depending on needs.
- Turnover and marketing: Cleaning, touch-up paint, and ads. A typical turnover might run $500 to $3,000.
Remember that mortgage payments are not part of NOI or the cap rate. They matter for cash-on-cash returns after you have calculated NOI.
Build automated rental comps
A simple system keeps you current and saves time.
- Set saved searches and alerts for Beachwood rentals and nearby towns on Zillow and Realtor.com. Track both new listings and price changes.
- Use Rentometer Pro for monthly neighborhood rent reports and batch exports. Combine this with your alerts for cross-checking.
- If you have MLS access, create a polygon search for Beachwood and the surrounding streets you care about. Include rented and closed statuses.
- Export CSVs to a Google Sheet. Save address, beds, baths, square feet, asking rent, list date, status, a link to the listing, and notes on condition.
- Flag seasonal listings and short-term rates so you do not overstate annual rent.
Validate and monitor
- Call a local property manager to confirm achievable market rent for your target bed and bath count.
- Physically inspect a few comps when possible to adjust for condition.
- Track trend indicators like ZORI and any updates to Ocean County FMRs on the HUD Fair Market Rents page.
Due diligence checklist for Beachwood SFRs
- Pull the latest Ocean County tax bill for the exact parcel.
- Get insurance quotes for a landlord policy and, if applicable, a flood policy. Check your FEMA flood zone at the FEMA Flood Map Service Center.
- Confirm rental demand and seasonality. Review days on market and off-season pricing.
- Collect 3 to 6 recent comparable rentals within the last 6 months that match beds, baths, and condition.
- Price out turnover tasks with local vendors for cleaning, painting, and minor repairs.
- Model best, base, and worst cases for rent, vacancy, and expenses. Run NOI, cap rate, and cash-on-cash with and without financing.
- Review Beachwood borough ordinances for rental licensing, inspections, and any rules around short-term rentals.
- Consult a New Jersey-focused real estate attorney and a local property manager for landlord-tenant rules, notice periods, and eviction timelines.
Common pitfalls to avoid
- Underestimating property taxes or flood insurance, which can reduce NOI.
- Using list rents instead of signed leases or ignoring concessions.
- Applying summer or weekly rates to a full-year model without adjustment.
- Comparing cap rates across different asset types without adjusting for risk and management intensity.
Legal, tax, and lending notes
- Investor loans often require 20 to 25 percent down and may carry higher rates than owner-occupied loans. Confirm current investor rates and terms with a lender.
- Rental income is taxable. Expenses such as taxes, insurance, repairs, and depreciation can reduce taxable income. Consider how 1031 exchanges and depreciation schedules may affect long-term outcomes.
- New Jersey landlord-tenant law governs deposits, notices, and eviction processes. Confirm state and municipal requirements before you buy.
- Flood zones along the Jersey Shore can require National Flood Insurance Program coverage, which may also affect underwriting.
Ready for local help?
You do not have to guess your Beachwood cap rate. I can pull current MLS comps, set up Brivity-powered alerts, and deliver a clean pro forma with taxes, insurance options, and rent validation. If you want a clear view of returns before you write an offer, I am here to help. Connect with Camille Simms to get started.
FAQs
What is a good cap rate for a Beachwood single-family rental?
- Many SFR investors target 5 to 8 percent before financing, but in high-tax coastal New Jersey, cap rates often run lower, roughly 3 to 6 percent depending on price, taxes, and rent.
How do New Jersey property taxes affect Beachwood rental returns?
- New Jersey’s high property tax burden can be your largest expense, so verify the current Ocean County tax bill and re-run your NOI and cap rate with that exact number.
Where can I find reliable Beachwood rent comps?
- Combine MLS data, neighborhood rent checks from Rentometer, HUD’s Ocean County FMRs, and the U.S. Census ACS, then validate with a local property manager.
Do I need flood insurance for a Beachwood rental near the bay?
- It depends on the flood zone. Look up the property on the FEMA Flood Map Service Center and obtain quotes if it is in a special flood hazard area.
How should I budget vacancy for a Beachwood rental?
- Use 4 to 10 percent of gross rent based on your leasing plan and seasonality, then refine once you have comps for days on market and turnover history.
