I'm submitting an offer to buy a 3-family in Union City, NJ. I'm aware that the rent control ordinance was revised to include 3-family in 2018, so this property fits the category. The units are all currently rented out for $1000-$1400, but the owner did not register the rent (Considering that building just became rent control 2 years go, this may be possible). The seller's agent told me that I can have the city do a legal rent calculation but that would take 2-3 weeks and I really don't know what to expect from the legal rent calc. What is the legal rent calc based on and is there a possibility that the legal rent calc comes out below what the current owner is collecting? Since I'm also planning to move in one of the units, what's the process to deleverage the rent control? Thank you so much.
My best advice is reading through the cities website on the information. That is your best way to be protected. I did some research on UC rent control couple years ago when I offered on a four family. Here's the website. I cant remember off the top of my head on owner occupied exemptions.
My best advice is reading through the cities website on the information. That is your best way to be protected. I did some research on UC rent control couple years ago when I offered on a four family. Here's the website. I cant remember off the top of my head on owner occupied exemptions.
@Alan Liu Are you planning to live in the property? If so, I believe you can charge whatever rent you would like, and then upon moving out keep the rents as is and rent the unit that you are moving out of at market. Double check the city code, as @Mark F.mentioned. I house hacked a property in Guttenberg, and this was the case.
If this is purely an investment property, then you are unable to mark to market the rent, unless you do a significant amount of renovations. If the rents haven't been previously registered, I'm not sure what the process would be.
It's my understanding that UC doesn't even allow rent increases after renovations. So be careful if that is part of your plan. I've inspected properties literally falling apart with holes in the roof, but the city won't allow rent increases in exchange for repairs. Until there is a significant change to the city leadership, it is the only city in that part of Hudson County that I would not invest in. JC allows for rent increases in proportion to renovation, West New York and Guttenberg have a higher annual increases, and are generally closer to market.
@Alan Liu you should check the local ordinances on rent control, but I don't think we see any major changes to policies like rent control or a landlords ability to evict non paying tenants until late 2021