Took over a vacant building in Weehawken, NJ. Need some advice

[Mike A.]

We just took over a vacant 3 unit apartment building in Weehawken NJ.  The laws in Weehawken, NJ aren't too clear on what we can rent the units out for.  The building was delivered vacant to us, so since we're the new owners, are we able to set the rates at market?  Any advice on steps would be appreciated.  

[Steve Schulman]

Quote from @Mike A.:

We just took over a vacant 3 unit apartment building in Weehawken NJ.  The laws in Weehawken, NJ aren't too clear on what we can rent the units out for.  The building was delivered vacant to us, so since we're the new owners, are we able to set the rates at market?  Any advice on steps would be appreciated.  

 Hi @Mike A. I do not believe the unit being delivered vacant changes much. You will have to start with previous registered rents for the 3Fam; however, you should be eligible for some type of increase on those registered rents. Non owner-occupied units and 3+ Family homes are subject to rent control in Weehawken w/ typical rent ordinance allowances from CPI index, water & property tax surcharges, capital improvement increases, etc. Hoboken allows 25% rent increases if the tenant moves out after 3+ year lease term, I believe Weehawken is the same. Make sure you request a legal rent calculation w. the rent board to see allowable increases/what new rents you can charge. Also, make sure you register your rents yearly; especially if using an LLC, the municipal will catch you.

Worth noting, if this is your primary residence you can reset rents to market value after two years of occupancy. This is huge and the ultimate value-add, especially in a market like Weehawken and Hoboken, which also allows you to decontrol rents. If you are not moving in, I’d highly consider it; even more so if the legal registered rents you find out are way below market. I have a client under contract who’s house-hack purchasing a 3Fam w/ bonus unit in Weehawken and doing this right now. This is an easy value-add, opportunity and great way to get rents up and in turn your property value up, with essentially little to no work. Hope this helps!