All Forum Posts by: Stefani Mokris

@Noyessie Hubert

If you plan to rehab all the units, if is more efficient and cost effective to do them at the same time. Then you can refinance. 

Hi @Noyessie Hubert owner occupant laws can be very powerful for you situation.  It can be very tough to ask tenants to leave in NJ depending on the town and location.  I see your location is Newark, not sure if that is BP default location or where the property is actually located.  If property is in Newark you have a major uphill battle. The good news is NJ sides with owner occupants when you request tenants to leave which can be very beneficial.  In regards to raising rents and keeping them, the max for raising rents is 10% unless particular town has rent control then you must follow those guide lines. In your case it will likely be best to ask them to leave and find new tenants at market rent. But once again this is town specific, there are towns that have some extreme laws that are not landlord friendly. 

@Noyessie Hubert Last year I purchased an 8 unit where the tenants were paying 50% of market rent.

I just went for it with gusto and sent them all certified letters notifying them of the rent increase. Most were paying $575 and market rent was about $1100. I raised the rent to $800 because I was planning to transition the units to paying for their own heat so a lower rent amount was fair.

I sent out the notices to the tenants that were on month to month leases because you have to honor existing leases. 1 moved out and 4 stayed.

Over the course of the year I raised the other 3 units as their leases expired. I’ve had a turn over of 4 units which has allowed for upgrades and renovations.

If you do decide to raise the rents considerably I would suggest staggering it so that you hopefully only end up with one vacancy/renovation at a time.

You will never get market rates if you only raise it 3% or 5% or $100 here and there.

When I first raised rents I kept everyone month to month because I hadn’t selected those tenants and wanted to see how they would be before signing a year lease. The new tenants that I chose all have year leases.

We would let them know that we'll be putting the home on the market right away and to be flexible with showings in order to rent it as quickly as possible to possibly relieve them of the responsibility of Jan rent.  Otherwise they are responsible.  Did they say they expect to be let out of their lease early?  They may expect to pay (why would they assume otherwise?)

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