Protecting yourself as a landlord in Jersey City NJ

[Eric S.]

For my first property I was considering doing a "house hack" and buy a multi family in Jersey City/Bayonne. However, I've heard plenty of "horror stories" about tenants not paying rent and just squatting, being destructive, etc etc. Since New Jersey is very tenant friendly, my budget isn't going to be cover downtown, and I'm also going to live in part of the building I was wondering what people do or have done to protect yourself as the landlord. I would also like to know if you have had great experiences because I may just be focusing too much on the negative. 

Some areas I was looking to buy were: JSQ, Bergen Lafayette, the Heights, and Bayonne. I'm quite a while off from buying but really want to be prepared for when I am.

[Jonathan Greene]

Hey @Eric S. . One of the biggest mistakes new investors make when they attempt to house hack is that they don't property vet the tenants. In Northern NJ in my market, most rentals are tenant pays the realtor fee which does reduce the applications, but seemingly increases the likelihood of a successful tenant. With this in mind, landlords still attempt to find tenants on their own and fail. Using a service like NTN is a fail-safe for tenant background. Tenants who have to pay a security (one month or one and a half months), one month rent and one month realtor fee may have a higher likelihood of success and certainly have more skin in the game.

Also, one of the biggest failures of new landlords who house hack is letting the tenants know that you are the owner. If at all possible, you should buy in an LLC and let the tenants think that you are just another tenant in the building so you get less knocks on your door at midnight because their faucet is leaky.

In short, the majority of disastrous tenant stories boil down to rushing to find a renter, keeping holdover renters who have not been checked, and not doing your due diligence on your prospective tenants.