Hello, I own a 3/3/2 in Newark NJ that I recently renovated to 4/3/2. I inherited my second floor tenant from the previous owner who had a personal relationship with them. They are currently paying $1200/mo., of which Section 8 covers $829. A quick bit of research shows that 3-bedrooms in the area go for around $1700 at most, $1400 at least. Outside of that, I filled the apartment upstairs at market rate and I'm concerned that chatter between the tenants could create tension in regards to price. Realistically what can I do in this situation? I'm inclined to think it's unlikely for the city to adjust the rent so dramatically, although their promise with Section 8 is to provide market rate to landlords.
You only have 2 choices if you want to increase the rent. You can put in for a rent increase through NHA but it will be a small increase. The other option you have is not to renew the tenants lease and ask them to leave so you can renovate the property and increase the rent. I would think about this choice before moving forward with option 2. Getting lower than market rate rent is better than not getting market rate rent. If this current tenant is paying their portion it may be wise to put in an increase with NHA and get what you can. The grass isn't always greener...
@Anthony Marin thank you