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General Landlording & Rental Properties

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Raising rent above 10% in Paterson, NJ

Posted Jun 26 2022, 11:30

I have a 2-unit house in the Northside area of Paterson, NJ where i am looking to increase the rent of my tenant. Its a 2 bed, with 1 attic room used as bedroom, so 3 bedrooms and 1 bath. The tenant was previously paying 1250$ before i got it in June 2021. Since it was covid time, i extended the same rent.  With the new lease, I want to raise the rent to 1500$ for the following reasons.

1. Inflation - 8% Because of this all raw materials and service cost will increase.
2. Maintanence of the house - this one is very old house built pre 1900. After i acquired it, i am paying 100-200$ average for routine maintenance. 
3. Average rent for comparable properties are till $1700.
4. Other unit, i have not received rent from September 2021 and i am at loss. Even this tenant is behind rent for 3 months.

With above reason, I gave the new lease to $1500. But the tenant contacted the rent levelling department and after hearing my points, they convinced the tenant to pay only till 1350$. They are asking me to agree on 1350$ for the new lease.

Should i agree for 1350$ rent for new lease terms or contest it in court filing eviction? Are my reasons valid for rent increase? 

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Chris Seveney
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Replied Jun 26 2022, 15:48

@Vignesh Kumar Subramanian

I would agree to the $1350 as if you have to evict and get a new tenant you will lose at least one months rent, have eviction and turnover costs. Is that worth the $1800 you are giving up to rent it for $150/mo less for a year?

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Replied Jun 26 2022, 21:42

Thanks @Chris Seveney yes putting it like that, 1350$ definitely sounds good. The tenant is a bad one, so i want to get them out too. 
I dont want to use this as a way to get them out, but with so many factors that i pointed out, 1350$ is not enough from my perspective. 
And they are back in rent 2-3 months and reliant on some assistance programs to give me rent. Every-time i have to behind them for rent. 

I feel if i cave in, i will lose ground. This might be psychological too.

Hypothetically if i contest this, will my reasons be valid? 

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Henry T.
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Replied Jun 27 2022, 15:17

rent levelling department??? Seriously? Um, maybe I'm out of touch, but WTF is that?

Where is the price leveling dept for gas, or food? ? Or is this just an organization that gets to discrimante against landlords?

I thought that crap only happened in Russia.  Last I heard the USA is a free country. That's what they keep telling us.

Free to charge what you want. If you don't like it, go somewhere else. Am I wrong?  Feel free to set me straight or fill me in.

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Replied Jun 27 2022, 17:04

@Henry T.i wish to be in the world as you mentioned. I came to real estate with lot of aspirations, but my tenants and NJ have sucked out all that from me. 
First NJ messed up with anti-eviction **** and then now this rent leveling that my tenant somehow caught up from somewhere.

Rent levelling applies for old building and multi unit families apparently. Their department representative reached out and was lecturing me on how i cannot raise more than 3.5-5%.https://www.patersonnj.gov/ego...

Its like a deadlock. Even if we file eviction, the court dates are so backlogged that I wont get anything till end of the year easily. I can file eviction and contest on following reasons

1. If the landlord makes certain capital
improvements to the property he/she may be
able to have the cost passed on to the tenants.
2. If the landlord is not making the profit he/she
is entitled to, he/she can petition for a
hardship rent increase.
3. If the landlord is supplying certain increased
services, the landlord can petition for a rent
surcharge.

But was wondering if anyone in here tried to contest similarly and have any experience doing so,

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Calvin Thomas
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Replied Jun 27 2022, 17:34
Quote from @Vignesh Kumar Subramanian:

@Henry T.i wish to be in the world as you mentioned. I came to real estate with lot of aspirations, but my tenants and NJ have sucked out all that from me. 
First NJ messed up with anti-eviction **** and then now this rent leveling that my tenant somehow caught up from somewhere.

Rent levelling applies for old building and multi unit families apparently. Their department representative reached out and was lecturing me on how i cannot raise more than 3.5-5%.https://www.patersonnj.gov/ego...

Its like a deadlock. Even if we file eviction, the court dates are so backlogged that I wont get anything till end of the year easily. I can file eviction and contest on following reasons

1. If the landlord makes certain capital
improvements to the property he/she may be
able to have the cost passed on to the tenants.
2. If the landlord is not making the profit he/she
is entitled to, he/she can petition for a
hardship rent increase.
3. If the landlord is supplying certain increased
services, the landlord can petition for a rent
surcharge.

But was wondering if anyone in here tried to contest similarly and have any experience doing so,

What made you invest in Paterson in the 1st place? Did you lose a bet or something?

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Shawn Mcenteer
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Replied Jun 27 2022, 17:58

towns like Newark, Paterson, Irvington make land lording very difficult.  Its not easy to increase rents with rent control in place.   At the end of the day I would be very surprise if a court rules in your favor when they have set maximum percentages in place.  

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Replied Jun 27 2022, 18:06

@Calvin Thomas Basically the math and also compared to Newark, Paterson i felt little better with the public diaspora.


@Shawn Mcenteer Hmmm. Maybe settling with 1350$ is the best option here.

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Shawn Mcenteer
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Replied Jun 27 2022, 18:17
Quote from @Vignesh Kumar Subramanian:

@Calvin Thomas Basically the math and also compared to Newark, Paterson i felt little better with the public diaspora.


@Shawn Mcenteer Hmmm. Maybe settling with 1350$ is the best option here.


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Henry T.
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Replied Jun 27 2022, 22:55

Vignesh, I thought California, Oregon, and Seattle were bad, but it sounds like Patterson, NJ is just as frightening.  I'm just wondering, and if I'm crazy please disregard. If the Rent Leveling Communists are willing to give you almost 8 percent, maybe you can counter and agree to 1375, or 1400?  Or,,,,,, reading the ordinance(thank you for providing), I see that this Rent Leveling applies to buildings of two or more rentals. Since the other bum in your apartment is not paying rent at all, is it possible for you to move into his place? and rent out your existing home, you'll have to evict him of course, but sometimes eviction priority is allowed for the owner that wishes to move into his unit. Check your local laws about owner occupy. This would also remove the Rent Leveling jurisdiction(because its now one rental). Maybe then you could raise him to anything you want.  Good luck.

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Nick Shri
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Replied Jun 28 2022, 05:11
Quote from @Henry T.:

rent levelling department??? Seriously? Um, maybe I'm out of touch, but WTF is that?

Where is the price leveling dept for gas, or food? ? Or is this just an organization that gets to discrimante against landlords?

I thought that crap only happened in Russia.  Last I heard the USA is a free country. That's what they keep telling us.

Free to charge what you want. If you don't like it, go somewhere else. Am I wrong?  Feel free to set me straight or fill me in.


 Nobody is forcing to accept that rent, it might be an assistance center. We are still in US, thankfully  :)

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Replied Jun 28 2022, 05:14

@vignesh you seem to be in a fix. Have you thought of taking a loss and selling the property outright? Buy a property in a landlord friendly state perhaps?

bad tenant, non-paying, you are loosing $ monthly, I would consider alternative options.

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Replied Jun 28 2022, 16:35

Hi @Nick Shri i came into this knowing all of it. i bargained loss of rent for a year and accounted it in my offer. 
Somehow i thought i could make it work. But honestly its not going as i thought.

I am already discussing with my agent on this. But i feel like i have taken a good brunt of this, most part of me feels to see through it.

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Replied Jun 28 2022, 16:59
Quote from @Vignesh Kumar Subramanian:

Hi @Nick Shri i came into this knowing all of it. i bargained loss of rent for a year and accounted it in my offer. 
Somehow i thought i could make it work. But honestly its not going as i thought.

I am already discussing with my agent on this. But i feel like i have taken a good brunt of this, most part of me feels to see through it.

You may want to consider increasing the rent to whatever is suggested / recommended and then market it. Take it as one bad investment in your overall portfolio and start looking for properties OOS (in landlord friendly places).

Try not to force anything on this property at this point, take what you can, minimize further bleed and move on.