Rental Property Investor · New York, NY · Member since 2011 · 95 posts · 10 votes
I purchased a house in NJ (Essex County) - 3 family home. The tenants are paying below market rents and are month to month. They have no leases in place. 2 of the tenants are fine but the 3rd one is only paying $650 when the going rent is $1,050.
My question is how much rent can I increase without legal implications.
Also the house currently has oil heat that the landlord pays - if i don't increase the rent and just convert their heating to gas so all tenants pay individually.... is that legal if I state it on their new lease? I am concerned that their gas bill would tremendously hike.
Investor · Central Valley, CA · Member since 2012 · 6k+ posts · 3k+ votes
13y
How is that you bought a property with a sitting tenant and not know if it is in a rent control area? Many of the cities and townships in Essex have rent control. Depending on where the property is, you could be stuck with that tenant paying under market rents for life. No kidding. You'll definitely want to do some research on your city/township and get details. Hopefully in you are in a city without rental ords.
Mobile Home Investor · Spanaway, WA · Member since 2008 · 1k+ posts · 578 votes
14y
If you have to go to court the first thing you will be asked for is a lease so this needs to be fixed as soon as possible. With month to month leases all it takes is a 3-10 day notice to vacate if you decide not to renew the lease. Then you clean up the unit convert the gas and rent it out at the market rates.
Rental Property Investor · New York, NY · Member since 2011 · 95 posts · 10 votes
14y
Can anyone let me know if there is a max limit I can raise the rent to? Maybe 10%? Or if I keep the rent the same and let the tenants be responsible for their heat (after the gas conversion). Would that permitted by law or am I breaking any rules?
Residential Landlord · Chicago, IL · Member since 2012 · 356 posts · 81 votes
14y
You'll want to check with Essex County to see if there are any restrictions. Otherwise you can raise the rent as much as you want and/or have tenants pay heat.
I've read before in NJ rentals have to be inspected. If that's the case in your area they could tell you any rules specific to your property.
Investor · Union, NJ · Member since 2011 · 838 posts · 295 votes
14y
Hi Raza,
I Invest in Union county so I am around the corner from you. What town is your 3 fam in? Irvington, Maplewood? I invest in Union township.
Anyway, regarding rental increases, rent control is governed by the municipality (town) well at least in Union County it is so I would check with your township on what the max increase is per year. For example in Union we can increase 4% per year.
And yes you should def. get leases in place to protect yourself.
If you convert to gas and put seperate boilers/furnaces in and than have the tenants pay their own this would most likely still count towards the 4% increase.
IF you need a good Plumber to do that kind of work I have a great guy who converted my single steam boiler to 4 seperate units in my 4 family.
Investor · Southeast, MI · Member since 2012 · 2k+ posts · 1k+ votes
14y
Unless your area has rent control or some other socialist laws, I don't see why you couldn't raise it to whatever the market will bear.
I purchased a house once from a guy and there was a long term tenant on a month to month lease paying $395. The market rent was $550-$600. I had to raise this guys rent. I figured he would move, but I wrote him a nice letter explaining that $395 was way too low. I told him that the rent was going up to $550 and I encouraged him to check the classified ads for similar rentals to see what they were going for. To my suprise, he agreed that $550 was fair and he stayed for quite a while after that.
If he had moved, I would've rented it to someone else for the higher amount.
Investor · Central Valley, CA · Member since 2012 · 6k+ posts · 3k+ votes
13y
How is that you bought a property with a sitting tenant and not know if it is in a rent control area? Many of the cities and townships in Essex have rent control. Depending on where the property is, you could be stuck with that tenant paying under market rents for life. No kidding. You'll definitely want to do some research on your city/township and get details. Hopefully in you are in a city without rental ords.