Being A New Landlord with undermarket value Rent

[Christopher Wall]

Good afternoon everyone!

I just closed on a three family in East Orange NJ and acquired the house with tenants already on the premise . I used the VA Loan, so I occupy one of the units while my tenants occupy the other two.

The previous seller had the rents way under market value . Two 3 Bedroom apartments for 1,000 per month and a 1 bedroom for 750 per month. Each tenant is on a month to month lease . I researched the rules for East Orange and I can only increase it by 7 percent . Should I terminate the least in 30 days or could I give them the option to pay 1400 for the three bedrooms?

Not sure about the best way to you about this decision !

Thank you for the help in advance ,

Chris

[Ray Reed]

@Mark F.  This is a 3 family house where the owner lives in one of the units, so he can terminate the lease at the end of the term.  Not saying he should do that but he can.