All Forum Posts by: Kevin K.

@Justin McElroy I've read the same ordinances.  What you're talking about is vacancy de-control.  Almost none of the municipalities in Hudson County have it.  Bayonne, I think, is the only one with vacancy de-control.  I'm not sure about owner occupied properties but I'm pretty sure you can't just rent at any price in those cases.  Each town is different when it comes to what properties are eligible for rent control.  The # of unit threshold varies town by town for owner occupied properties also.  One thing to confirm is if a prior owner has ever registered rents.  If they haven't, then that's good.  You can then register at the rent you end up getting once leased.  Honestly, the ordinances are so complicated that none of the towns are able to enforce them down to the exact legal language that's in the ordinances (i.e. all of them say that the starting base rent in the year in which the ordinance is implemented became the starting point for all future increases...try to prove what the rent was in 1970 for a specific apartment that was never registered!).  Add in the complexities of service charges vs capital improvements, CPI rates at various points in time, etc. and the paperwork and effort to track it all gets worse.

@Yariv Morchi If you've been looking then you know the market has gotten too expensive.  Most deals I see are 6% cap rate or less.  Agents are constantly peddling me deals that they claim are 6.5% or more but it's just a numbers game with most expenses missing (i.e. vacancy, repairs, maintenance, etc.) unless you're a slumlord.  The only deals where you can get over 7% cap rate are value add deals that require work.  I don't like 100yr old buildings that are asking sub-6% cap rates with at market rents.  Hence, I've focused on finding development deals off market where you end up with a 6.5%+ cap rate and a brand new building.  I underwrite conservatively in those cases since it's the riskiest form of investment (i.e. slightly below market rent, lots of const cost contingency, etc.).  Also, the larger multi-unit deals (older buildings) are all rent controlled in Hudson County...pretty much every city has rent control here with mostly CPI based rent bumps.  Good luck.

@Stu Basham See my post about property taxes here to get an understanding of how the reval works:

https://www.biggerpockets.com/forums/311/topics/31...

@Jessica Zolotorofe is right in that it's hard to predict.  The key is how your property has appreciated in value relative to the rest of the properties being revaluated.  If your property has grown more in value relative to others, you get a bigger portion of the pie (i.e. your property funds a bigger portion of the city/county's budget).  You won't really know until all the properties have been re-assessed.  It's a double edged sword...you feel good knowing your property is worth more but then you're paying more taxes.  I've seen tons of properties that I know will definitely get large increases though...like a 2-fam property in downtown Jersey City paying $6000 in taxes when it should be closer to $10K+.  Some are more obvious than others.  We're all waiting to see how it shakes out.

@Hanna Edwards The truth in renting guide is the main pamphlet that landlord's are supposed to give tenants at lease signings.  It has a bunch of info.  I'm not sure if it'll have specifics about protected tenant rules at the state level.  Also check out the NJ state DCA website.  Jersey City has rent control for 5-family and larger buildings (except certain new construction, etc.).  I've posted a decent amount about rent control in BP...check out my prior posts.  See links below.

Truth in renting guide:
http://www.state.nj.us/dca/divisions/codes/publica...

DCA:
http://www.state.nj.us/dca/divisions/codes/publica...

Jersey City rent control ordinance: 
https://www.municode.com/library/nj/jersey_city/co...

@Ken Dayal

See my post here for a recommendation I made before:

https://www.biggerpockets.com/forums/24/topics/275...

He used to be a licensed PE.  I've used him at least twice so far and thought he was thorough and knowledgeable.  He's getting a little older now though but still does the hard stuff like getting on roofs, etc.  If the roof is too high with no hatch access then he may not be allowed to get up there (insurance reasons).

@Michael Wolffs I don't own in Jersey City, but I've never come across any regulations requiring any notification or registration with the city for 3-families.  I've done a decent amount of research on JC regulations, and your research seems to agree as well.  If it were rent controlled (5+ units), then you have to register the rents with the city but that's not applicable in your case.

@Michael Wolffs @Ryan Goldfarb Forgot to mention you guys in my response.  See response above.  Just to clarify, they don't re-inspect the property.  They just re-issue the certificate with the updated ownership info.

See my post here for some useful info on green card inspections:

https://www.biggerpockets.com/forums/432/topics/18...

All you have to do is register with the NJ state DCA.  Just because you have a green card already isn't sufficient.  You have to notify the DCA that the ownership changed so that they can issue a new "card" which is basically piece of paper you post on a bulletin board somewhere in your property in a conspicuous place.  It will have your info on it as the owner.

See below for forms related to registering with the DCA and other useful info:

Forms: http://www.nj.gov/dca/divisions/codes/offices/hous...

FAQs: http://www.nj.gov/dca/divisions/codes/offices/bhi_...

@Claudia Ho Your agent doesn't seem too knowledgeable on the ordinances.  2-families in Union City are exempt from rent control.  Only 4-families and larger are subject to rent control except owner occupied 4-6fams.  Increases are limited to CPI.  Pretty much everything in West New York is rent control except for owner occupied 2-4fams, new construction, >$1000 rent condos, etc.  Most cities in Hudson County do not have vacancy de-control.  I only know of Bayonne passing vacancy de-control a few years back.  The laws are complicated but most cities have their ordinances listed online.  Read them here:

West New York: http://ecode360.com/7058058

Union City: http://ecode360.com/15396991

The laws are also subject to change.  Union City eliminated their improvement allowance in 2015 so no more permanent increases in base rent from making improvements.

Coop ownership isn't as common in Hudson County as it is in NYC.  Just be aware of the rules around renting your unit since coops tend to have greater restrictions than condos.  5 out of 50 doesn't seem out of the ordinary.  That's like someone moving/selling every 10 years in the building.

See link below:

http://www.nj.com/hudson/index.ssf/2016/04/jersey_...

A reval doesn't mean taxes are going up.  Property tax is like a pie chart where each property contributes to the overall pie.  The overall pie (i.e. the total property tax collected) doesn't just go up.  All that happens in a reval is that your property is assessed to it's true market value, and the citywide tax rate is adjusted to reflect changes in assessed values.  In Jersey City, assessed values are around 30% of market value because the city hasn't adjusted valuations since 1988.  Because assessed values are so low, the tax rate is around 7% (i.e. $300K market value * 30% equalization ratio = $90K assessed value * 7% tax rate = $6,300 annual property taxes).  Another way to look at it...7% tax rate * 30% equalization ratio = 2.1% effective tax rate.

If your property value has gone up more since 1988 relative to the rest of the market, then you will take a bigger share of the pie (i.e. your taxes will go up).  However, if your markup in assessed value is about that the same as the overall markup of the city as a whole, then you're share of the pie stays the same and thus your property taxes are the same.  In Jersey City, it is expected that commercial properties (i.e. offices, large multi-family rentals, etc.) will see a bigger increase in property taxes, and waterfront condos that don't have abatements will see increases.  However, I suspect taxes on certain properties in Greenville, for example, will likely go down as the waterfront takes a bigger share of the pie.  It really is on a case by case basis though.  You have to look at your current assessed value, convert it to market value using the latest equalization ratio, and then determine if that market value is higher, lower or about the same as its true market value, and how much higher/lower it is relative to its true market value.  It's the relative difference that matters and how that relative difference compares to the market as a whole with the reval.  If your property's market value has grown faster than the equalization ratio has accounted for over time, then you may take a hit.  I've seen some properties around Journal Square and the Heights with ridiculously low assessed values so those properties should take a hit unless the reval shows that the waterfront takes a bigger share than expected.  It's complicated...

Some useful links with info on current tax rates and equalization ratios in NJ state:

http://www.state.nj.us/treasury/taxation/lpt/taxra...

http://www.state.nj.us/treasury/taxation/lpt/lptva...