Cape May County

Cape May County sits at a 1.9% cap rate and a gross rent-to-price ratio of 0.029, which places it firmly at the appreciation end of the spectrum, nowhere near cash-flow territory. The numbers are blunt: at a $813,005 median purchase price, a 20% down payment of $162,601, and a 6.85% rate, the modeled monthly mortgage runs $4,262. Add $694 in estimated operating expenses and $1,829 in combined monthly taxes and insurance, and you're looking at total carrying costs that dwarf the $1,983 median rent. The result is a projected cash flow of negative $2,972 per month and a cash-on-cash return of -19.07%. Year-over-year home price appreciation came in at 9.64%, which explains why anyone owns here at all, but that appreciation alone does not make a rental underwrite work. The overall score of 38 out of 100, with a cash-flow sub-score of 15, reflects exactly that tension. Cape May ranks 761st out of 1,000 counties nationally, sitting at the 3rd percentile, and is last among the 21 New Jersey counties in this dataset.

The investor profile this market suits is narrow: a buyer who can tolerate deep monthly losses in exchange for capital appreciation, likely someone with a personal-use angle, a vacation-rental strategy in a high-demand coastal market, or long enough time horizon to let price growth compound. The 9.64% appreciation rate is real and meaningful at these price points, adding roughly $78,000 in value over a single year on the median home. A pure buy-and-hold landlord seeking monthly income should look elsewhere. A value-add operator faces the same math: even compressing acquisition cost or forcing equity through renovation, the rent-to-price ratio at 0.029 leaves almost no margin. Short-term or seasonal rental operators may see a different income picture than the median annual rent implies, but that is a separate underwrite requiring local STR occupancy and rate data not provided here.

The property tax situation deserves its own line on any underwrite. New Jersey's state-average effective rate used here is 2.49%, flagged as very high, and at that rate the annual tax bill on the median Cape May property is approximately $20,244, or $1,687 per month before insurance. Combined with $142 per month in estimated insurance, the monthly tax-and-insurance load alone is $1,829. That figure is not a rounding error relative to a $1,983 median rent; it represents 92% of gross rent before a single dollar of mortgage service, maintenance, or vacancy. The honest caveat is that this rate is a state-average estimate from Tax Foundation 2024 data, and actual county or township rates in Cape May may differ, so confirm the precise millage before you build any model around these numbers. But even with meaningful downward variance, the tax burden here is a structural drag that a cash-flow buyer simply cannot underwrite around.

The primary risk in Cape May is concentration. With a population of 95,456 and an affordability index of 7 out of 100, the renter pool capable of paying market rents is thin, and the economy of a coastal resort county is seasonally dependent by nature. A significant portion of rental demand is likely vacation-driven rather than from long-term residents, which introduces occupancy volatility and regulatory exposure as municipalities continue to tighten short-term rental rules across coastal New Jersey. The stability score of 50 reflects this mixed picture: not catastrophically unstable, but not a steady year-round rental market either.

Compared to the neighboring counties in this dataset, Cape May is the weakest performer on every investor metric that matters for buy-and-hold rentals. Hudson County's rent-to-price ratio of 0.057 is nearly double Cape May's 0.029, with a median home price of $617,352 and median rent of $2,912, and it carries an overall score of 48. Union County at 0.051, Essex at 0.044, Passaic at 0.048, and Monmouth at 0.046 all offer materially better rent coverage relative to price, at lower entry points, and with overall scores ranging from 47 to 51. The only reason to choose Cape May over any of these neighbors is if your investment thesis is built explicitly around coastal appreciation, a vacation-rental premium, or personal use, and you have the liquidity to carry a nearly $3,000 monthly deficit while that thesis plays out.