$9,600 a Year, Gone
Last year I took on a four-unit in Bergen County -- a nice pre-war building, well-maintained, good tenants, no major deferred maintenance. The owner had done almost everything right. Except for one thing: he hadn't touched his rents in three years. Every unit was sitting $150 to $250 below market. Added up, that was roughly $800 a month across the building -- $9,600 a year in income he just wasn't collecting. Not because tenants couldn't afford it, not because the building didn't justify it, but because he'd never sat down and actually compared his rents to what was leasing around him.
This isn't unusual. In my experience managing properties across northern New Jersey since 2014, underpriced rents are the single biggest leak in most small landlords' income statements. It's also the most fixable one. So let's talk about how to actually grow your rental income in New Jersey -- the real tactics, not the generic advice.
Know What Your Units Are Actually Worth
You can't price what you haven't researched. The first step is a real rent comp analysis, and I mean more than just glancing at Zillow. Start with Rentometer -- punch in your address, bedroom count, and square footage, and you'll get a distribution of what similar units rent for within your zip code. It's not perfect, but it gives you a useful baseline. Then cross-reference with active Zillow and Apartments.com listings within a half-mile of your property. Pay attention to unit condition, not just bedroom count. A renovated two-bedroom in Hackensack is a different product than an unrenovated two-bedroom in Hackensack, even if they're on the same block.
The step most landlords skip is the ground-level research. Pull up Craigslist and Facebook Marketplace for your area. Drive the neighborhood and look for "For Rent" signs. Call a few listings and ask what they're getting. This is how you find out what's actually leasing, not just what's listed. I've seen plenty of Zillow listings sit at inflated prices for months -- that doesn't mean the market supports those numbers. What matters is what tenants are actually signing leases at, and that takes a little legwork to figure out.
Raising Rents Without Blowing Up Good Tenancies
Once you know you're under market, the question becomes how to close the gap without losing tenants you'd rather keep. The answer is almost never "jack it up to market rate overnight." A tenant paying $1,500 who gets a renewal notice at $1,800 is going to leave, and you'll spend $3,000-5,000 on turnover costs (vacancy, cleaning, painting, leasing fees) to maybe get a new tenant at $1,750. You've lost money on the deal.
The better approach is phased increases timed to lease renewals. If you're $200 under market, bring rents up $75-100 at the first renewal and close the remaining gap at the next one. Most tenants will absorb a reasonable increase, especially if you can point to specific justifications: you upgraded the appliances, replaced the bathroom vanity, or installed a new HVAC system. The increase feels earned rather than arbitrary.
Timing matters too. Send renewal offers 90 days before lease expiration -- this gives tenants time to evaluate, and it gives you a buffer to market the unit if they decline. If your leases expire in winter, consider restructuring to spring or summer expirations over time. Moving in January in Montclair is nobody's idea of fun, and you'll get a wider applicant pool in warmer months.
Value-Add Improvements That Actually Pay Back
Not every renovation makes financial sense for a rental. I've seen landlords spend $30,000 on a kitchen gut-reno for a unit that can only support a $200/month rent bump -- that's a 12-year payback, which is terrible. The improvements that work are the ones with a payback period under three years.
In-unit laundry is the single biggest bang for the buck in New Jersey rentals right now. A compact washer-dryer combo costs $800-1,200 installed, and in most north Jersey markets it supports a $50-100/month rent premium. That's a payback period of 8-24 months. Tenants will pick a unit with in-unit laundry over one without it almost every time, so it also reduces vacancy.
Kitchen updates are next. You don't need to gut the kitchen -- new countertops (butcher block or basic quartz), updated cabinet hardware, a stainless appliance package, and a tile backsplash can run $3,000-5,000 total and justify a $100-150/month increase in most Bergen, Passaic, and Essex County markets. That's a payback of two to three years, and the improvements will last through multiple tenancies.
Parking is the wildcard that people forget about. In towns like Hoboken, Jersey City, Montclair, and Morristown, a dedicated off-street parking spot is worth $75-150/month -- sometimes more. If you've got a driveway or a small lot that's being used as a free perk, you're giving away real income. Formalize it. Charge for it. Tenants who need parking will pay, and tenants who don't can opt out.
Ancillary Income Most Landlords Ignore
The rent check is the obvious income line, but it shouldn't be the only one. Pet rent is the easiest money in property management. Roughly 70% of renters have pets, and charging $25-50/month per pet as recurring pet rent (on top of a one-time pet deposit) is standard practice in New Jersey. On a 10-unit building where six tenants have pets, that's $150-300/month you're probably not collecting right now.
If you have a larger building -- say six units or more -- a coin-operated or app-based laundry room can generate $50-100 per unit per month in revenue with minimal maintenance. The machines pay for themselves within the first year, and the ongoing income is nearly pure margin. Storage is another one. Finished or semi-finished basement space, attic storage, or even outdoor storage sheds can rent for $50-100/month per unit. Tenants accumulate stuff. They'll pay to keep it somewhere.
Stop the Bleeding: Vacancy and Turnover
Every month a unit sits empty costs you 8-9% of that unit's annual rent. On a $2,000/month apartment, a two-month vacancy costs you $4,000 in lost rent plus another $2,000-3,000 in turnover expenses. The fastest way to grow income isn't always raising rents -- sometimes it's just keeping units occupied.
Start marketing units 60-75 days before lease expiration, not after the tenant moves out. Use professional photos -- listings with good photography lease 30-40% faster than phone snapshots. Syndicate to Zillow, Apartments.com, Facebook Marketplace, and local Craigslist. Respond to every inquiry within two hours, not two days. These aren't revolutionary ideas, but the difference between a two-week vacancy and an eight-week vacancy is enormous when you multiply it across units and years.
Retention is even cheaper than fast leasing. A $200 gift card and a small rent concession at renewal costs you far less than a turnover. Know which tenants are worth keeping and make it easy for them to stay.
Cut the Expense Side
Revenue is only half the equation -- your net operating income is what actually matters. Three expense categories are worth attacking every year. First, insurance: get three quotes annually. I've seen landlords save $500-1,500 per property just by shopping their policy, especially if they haven't switched carriers in five years. Second, property taxes: if your assessment is above market value, file an appeal. In New Jersey, where property taxes are the highest in the country, even a modest reduction in assessed value can save you $1,000-3,000 annually. Third, vendor contracts: if you're paying the first plumber or landscaper who picks up the phone, you're overpaying. Get competing bids on every contract over $500. A property manager who handles hundreds of units gets volume pricing you can't access on your own.
The Rent Control Warning
Before you start raising rents, you need to know whether your municipality has rent control -- because in New Jersey, several cities do, and the rules vary significantly. Newark caps most increases at a percentage tied to CPI. Jersey City has rent control for buildings built before a certain date. East Orange, Fort Lee, and several other municipalities have their own ordinances with different thresholds and exemption rules. If your property falls under rent control and you raise rents beyond the allowable limit, you're not just looking at a tenant complaint -- you're looking at mandatory rent rollbacks, penalties, and potential legal exposure.
Even in municipalities without formal rent control, New Jersey's Anti-Eviction Act means you can't refuse to renew a lease simply because a tenant won't accept an unreasonable increase. The courts have opinions about what "unconscionable" means, and those opinions don't always align with what landlords think is fair. Do your homework on your specific municipality before sending out renewal letters.
The Bigger Picture
Growing rental income isn't about any single tactic. It's about running your property like the business it is -- knowing your market rents, pricing accordingly, investing in improvements that pay back, collecting every dollar of ancillary income you're entitled to, and keeping your expenses honest. The Bergen County owner I mentioned at the start? Within 12 months of getting his rents to market, adding pet rent, and formalizing parking charges, his annual income was up over $14,000 -- on a four-unit building. That's the difference between a property that treads water and one that actually builds wealth.
If you're not sure where your rents sit relative to market, or you suspect you're leaving income on the table but don't know how much, request a free Portfolio Performance Review. We'll pull comps for your specific units, identify the ancillary income opportunities you're missing, and give you a realistic picture of what your properties should be earning.
