Rent Increase? Limit?

3 Replies

Good morning BP!

Is there a limit on how much I can increase rent of an existing tenant, assuming the lease is expiring soon? I know you have to honor any existing leases if you purchase a new property. Let's say I determine the existing lease is super low and I want to raise $200/ month; aggressive i know, but is it legal? It shouldn't need to be raised slowly over time, correct?

Also, what if I want to make improvements to the units while the tenant is still living there. Can I THEN increase rent amount?

I'm assuming there's some sort of laws in NJ managing that, but I wouldn't know where to start looking. Thanks!

-DH

@Dennis A Higgs Jr as long as there are no local rent control laws, you can most definitely raise rent. The market will ultimately dictate how much you can raise the rents. I recently acquired a property in Cicero, IL, and I am raising the rents on the 2 bedroom units from $675 to $900 per month. The tenants are not pleased, but the market says they should be paying closer to $1050-1100. 

Originally posted by @John Warren :

@Dennis A Higgs Jr as long as there are no local rent control laws, you can most definitely raise rent. The market will ultimately dictate how much you can raise the rents. I recently acquired a property in Cicero, IL, and I am raising the rents on the 2 bedroom units from $675 to $900 per month. The tenants are not pleased, but the market says they should be paying closer to $1050-1100. 

Makes sense.  Thank you! Yea, assuming the amount of the rent increase I know the tenant wouldn't be happy and possibly move out sheet his/her lease.  What if I make improvements during lease? Either exterior... or interior; could I raise at that time too?

@Dennis A Higgs Jr I typically don't make major improvements when a tenant is in a property. It is just too much hassle trying to work around their schedules, etc. I also would rather them move out so I can really go through the unit and jump to the top of the market rent. 

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