All Forum Posts by: Stefan Tsvetkov

I agree purchasing properties in compliance with the respective rent control ordinance is an important consideration and not to be taken lightly. 

This is easier said than done though as in my experience aspects of rent control regulation can and do change fairly frequently at the whim of the town's officials. 

One example is Union City's recent update to their ordinance reducing the number of units for an investment property to be rent controlled from 4 to 3. Thus, any prudent investor in a 3-family property in Union City would now be stuck with a property subject to rent control.

The relatively safer way to avoid rent control would be investing in towns which do not have any rent control ordinance altogether (thus rather than tweak a small aspect that renders your property rent controlled, they need to actually put a whole set of rules in place, which arguably is a bit harder, though can also happen). 

Also, towns which appear to have a more investor-friendly intention and their current ordinance serves evidence of such intention (I would say Jersey City and Bayonne).

Rent control may impact profitability in the property. A 2-family investment property (non-owner occupied) in Passaic would be subject to rent control. The good thing to my knowledge Passaic has vacancy decontrol, so that is definitely helpful. Can call the town to confirm what is the current state of things.

@Dalwin Garcia Rent control in Passaic applies to much any investment property except: single family home, single condo/coops, owner-occupied 2-family and new construction. A 2-family investment property would thus be subject to rent control assuming the property has been registered with the town's rent control office.

You can find the town's rent control ordinance here: Passaic, NJ Rent Control Ordinance

I had an accepted offer for a 4-family property with a big parking lot, at Sherman Street in Montclair. It is considered a less nice area of town close to Pine St near Bay Street train station. 

The property was cash flowing/or had the potential to cash flow really well, would venture a 9-10% cap rate. It was a nice property listed then at below $700k and I personally found it enticing to invest in an area belonging to a prestigious town such as Montclair. I pulled off my offer in the hope of finding a property closer to where I live, traveling to there was the only drawback for me.

Montclair is one of the few towns in NJ with no rent control whatsoever and the availability of low priced multifamily properties (single family nicer houses seem to control the higher price point) makes it attractive to invest there. Potential renovation and condo converting (done at the State level) could be an added benefit before reselling the building.

Properties not subject to rent control in Morristown include owner occupied properties upto 4 units as well as new construction properties. Much any other investment property is rent controlled in the town. That said the town does have 'vacancy decontrol', meaning you can set your own rent once the current tenant moves out.

Please see their ordinance here: Morristown, NJ Rent Control Ordinance

Here is a link to the rent control ordinance for North Bergen:

North Bergen, NJ Rent Control Ordinance

I had spoken to them about 1.5 years ago and as of then (agree with @Sol G.) any investment properties including condos, except upto 4 units owner occupied properties are deemed "rent controlled" by the town.

Below is a very high level summary of towns with no rent control in NJ as well as towns with vacancy decontrol. Parts of this may be out of date, as ordinances change fairly often in my experience:

* No rent control: Montclair, Secaucus, Kearny, Garfield, Carlstadt, Wood-Ridge

* No rent control for investment properties upto 4-units inclusive: Jersey City, Bayonne, Bloomfield (upto 5 units)

* Vacancy decontrol (very high level, alphabetic): Bayonne, Belleville, Cliffside Park, Clifton, East Rutherford, Edgewater, Elmwood Park, Fairview, Hackensack, Hoboken, Leonia, Lyndhurst, North Arlington, Nutley, Passaic, Ridgefield Park

P.S. By any means, please call towns to confirm.

@David Smith Here is a link to the rent control ordinance for Newark: 

http://clerkshq.com/Content/Newark-nj/Books/Code/N...

Looks like much any investment property in Newark except new construction or substantial rehabilitation is rent controlled irrespective of number of units. 1-4 unit owner occupied is exempt as well. 

I believe the above is upto date, though feel free to call the city to confirm.

Here is the online publication as for the rent control ordinance in West New York, NJ: https://ecode360.com/7058071

There is some chance that the latter may have been updated and not posted online (towns tend to change their ordinance fairly often), please reach to the town to confirm. Per the above just 2-4 units owner occupied is not rent controlled. Exemptions apply to new construction, and substantial rehabilitation among others.

I do not see a reference to 'vacancy decontrol' (the mere moving out of a tenant allowing you to set new rents as you please) and likely there is no 'vacancy decontrol'. 

Units rehabilitation and looks like in this case condo conversion (if rents are above $1000) may be potential routes for decontrolling the building.

@Mike Kalob I have researched rent control in the various towns in the area and compiled a small list for my use. Kearny is in my "green area" of 'no rent control' though I haven't been able to produce a specific ordinance to prove this. Feel free to call Kearny town (https://www.kearnynj.org/contact) to confirm.