If a tenant remains in possession without the landlord’s consent after expiration of the term of the rental agreement or its termination, the landlord may bring an action for possession and for rent and the landlord may also recover his or her actual damages.

Sounds like you already closed, so for the next time you should have an estoppel certificate completed by each of the existing tenants; with that, you can establish conditions of the premises at move-in (along with lots of other things) - especially important if the seller does not have such records (hobbyist landlords and mom-n-pop landlords don't always use good paperwork and practices).Now, what do you do in your present situation?

The lease agreement is your protection as a landlord....couple that with tenant screening and due diligence and you eliminate a lot of your problems.

Also, I'm assuming the note holder gets a check in the mail and that is there is no holding costs like taxes, insurance etc like if I was a landlord?

May seem trivial, but when other rental properties have no blinds at all - it sends a message on the type of management company or landlord that you want to be.

If they are very familiar with the law, they might be familiar with landlording and decide not to piss off someone who might be spiteful to the property.

What does their probation mean for me as a roommate/landlord?

As landlords ourselves, we know to take care of property and pay on time.

If my rentals required 50% of the rents to go toward rehab or repairs as mentioned in that quote - well who the heck would ever want to be a landlord if that were the case?

I wonder what the NJ landlords have to say about these "inspection" laws.