Passaic County

Passaic County sits at a gross rent-to-price ratio of 4.57%, producing a modeled cap rate of just 2.97% on a $604,083 median purchase. At a 6.85% financing rate with 20% down, the mortgage alone runs $3,167 per month against $2,298 in median rent, generating an estimated negative cash flow of $1,672 monthly and a cash-on-cash return of negative 14.44%. Those numbers place Passaic firmly at the appreciation end of the cash-flow-versus-appreciation spectrum, scoring 84 out of 100 on appreciation but only 38 on cash flow. Year-over-year home price growth of 4.46% confirms that capital has been compounding here, but current income economics are deeply negative. An affordability index of 17 out of 100 signals that the pool of owner-occupant buyers is constrained, which can support rental demand structurally, but it does not fix the income-expense gap a landlord faces at today's prices and rates.

This market belongs almost exclusively to the appreciation buyer who can carry negative cash flow from other income, is betting on continued price appreciation in the New York metro orbit, and has a long enough time horizon to let equity accumulate. It is not a market for the cash-flow buyer. The numbers make that blunt: even before financing costs, a 2.97% cap rate falls well short of the cost of debt at 6.85%, meaning every leveraged dollar works against you on day one. A value-add operator might close part of that gap by lifting rents above the $2,298 median, but the structural cap-rate ceiling in this market means the math stays difficult unless you are buying significantly below median or executing a meaningful rent-increase strategy on an underrented asset.

The tax and insurance picture deserves its own line in your underwrite, and it is the single most important carry-cost consideration in this market. New Jersey's state-average effective property tax rate of 2.49% is among the highest in the country, flagged here as very high, and on a $604,083 purchase that translates to $15,042 in annual taxes alone. Combined with $1,269 in annual insurance, the combined monthly tax-and-insurance burden is $1,359, which is already 59% of gross rent before you touch the mortgage or any operating expense. The $804 in estimated monthly expenses on top of that only deepens the hole. Critically, the 2.49% figure is a state-average estimate from Tax Foundation 2024 data; actual rates at the county or township level in Passaic can differ materially, and some municipalities in northern New Jersey run above even that already-high baseline. Underwriting at the specific parcel's tax bill, not the state average, is non-negotiable here.

Passaic sits at the 21st national percentile across 1,000 counties scored and ranks 18th out of 21 New Jersey counties, meaning it compares unfavorably even within a state that is already challenging for rental investors. Against its neighbors, the picture is mixed but consistently mediocre. Hudson County offers a meaningfully better rent-to-price ratio of 5.66% versus Passaic's 4.57%, which is enough to move the cash-flow needle in a material way, and Hudson's overall score of 48 is only marginally below Passaic's 49. Union County at 5.06% rent-to-price and an overall score of 51 is a cleaner buy-and-hold candidate on income terms than Passaic, at a comparable median price of $614,241. Essex County at 4.35% rent-to-price and an overall score of 47 is even worse on cash flow than Passaic. Bergen County and Monmouth County both carry median prices above $733,000 with rent-to-price ratios of 4.53% and 4.64% respectively, making them roughly equivalent income plays at substantially higher capital outlays. If you are optimizing for rent-to-price within the northern New Jersey corridor, Hudson County is the first alternative to evaluate. If you are fixed on Passaic specifically, the investment case rests almost entirely on proximity to New York metro employment and continued home price appreciation at the 4.46% annual rate, neither of which can be guaranteed, and both of which do nothing for you in the years you are writing checks to own the property.