Is Being A Landlord in New Jersey Right For Me?

If you’ve been eyeing New Jersey real estate as a way to build wealth by either turning your primary home into an investment property or investing in rental properties, you’re not alone. Owning rental property can create cash flow, equity growth, and provides tax advantages—but it also demands time, know-how, and a real tolerance for risk. The question shouldn’t be “Is landlording good?” but rather “Is landlording a good fit for you?” We have put together a very candid and practical guide to help you come to your own conclusion. 

First, a quick gut-check: 8 things to weigh before you buy an investment property or convert your home to a rental

One of the easiest points of entry into becoming a landlord, is to convert your existing home into a rental as you and your family relocate to a new home, but this list also applies to those that are looking at purposefully investing in rental properties. 

1. Time & responsiveness. Can you (or your team) respond to midnight leaks, heating outages, or a broken lock the same day? Do you have a network of vendors you can call upon to address maintenance issues when they occur, especially when it’s an emergency?

2. Cash reserves. Do you have at least 3–6 months of expenses per unit (mortgage, taxes, insurance, utilities you cover, and a maintenance buffer)? Do you have funds to cover the costs with preparing the property between tenants?

3. People management. Are you comfortable screening applicants lawfully, setting expectations, documenting issues, and having firm but fair conversations?

4. Regulatory comfort. New Jersey is “tenant friendly” and rules-heavy. Are you willing to learn (and follow) New Jersey anti discrimination laws, fair housing, security deposit, rental registration, lead-safety, habitability and eviction rules?

5. Local nuance. Many rules (rent control, inspections, certificates of occupancy) are municipal and vary widely from town to town. Can you keep track of these requirements?

6. Risk tolerance. Could you handle a non-paying tenant, a vacancy for 2-months, or a surprise $6k sewer line repair without panic?

7. Record-keeping. Are you willing to keep meticulous records, such as Lease files, notices, ledgers, inspections and photos?

8. DIY vs. hiring help. Will you self-manage or hire a property manager? If you self-manage, will you use a bookkeeper, super, and attorney when needed?

If most of these feel like a fit and don’t have you running for the hills, keep reading. If several feel like a stretch, consider partnering with professionals or hitting pause.

When you probably shouldn’t become a landlord (yet)

There are a few scenarios that you need to honestly evaluate for you and your family and should likely be red flags that being a landlord is not a good fit for you now. 

• You need immediate, guaranteed cash flow. Even great properties have vacancies, turn costs, and unexpected repairs. If you “need” the rent to pay the mortgage, insurance and taxes every month, being a landlord may not be a good fit until you have more surplus funds on hand.

• You dread conflict. Landlords sometimes have to say “no,” enforce late fees, or file for eviction in court. If the thought of that is unbearable, the role will be stressful.

• You resist checklists and paperwork. Compliance isn’t optional in NJ; missing a notice or form can cost real money. Being a landlord is more than just collecting a rent check and in New Jersey there are many laws we need to be compliant with ranging from the Federal, State and municipal levels.

• You’re undercapitalized. If a $5–10k repair or a few months of nonpayment would sink you, focus on saving first and building up your reserves. Ideally, you should have between 3-6 months of funds available in the bank for the unexpected.

• You expect “set it and forget it.” Rentals are a business, not a bond. They reward active, informed ownership.

Core New Jersey legal & compliance basics (the essentials)

When it comes to being a landlord, there are many laws we need to adhere to that come from the Federal, State and Municipal levels. Compliance with these various laws is critical to being a good landlord and avoiding penalties. We’ve identified some of the most critical ones below, but keep in mind, this is not an all-inclusive list.

1) Federal Fair Housing Act (FHA) & NJ Law Against Discrimination (NJLAD).
The federal Fair Housing Act (FHA) of 1968 provides some significant protections against discrimination in both the sale and rental of real estate. These protections are based on several protected classes, which include: race, color, national origin, religion, sex (including sexual orientation and gender identity), familial status, and disability. It also requires that the landlord accept reasonable accommodations (e.g., allowing an assistance animal even in a “no pets” building) and, in many cases, reasonable modifications for disability. 

The New Jersey Law Against Discrimination (NJLAD) goes much further when it comes to anti-discriminatory activities.  In housing for example, New Jersey explicitly protects “source of lawful income,” which means you generally may not refuse applicants because they use vouchers or other lawful rental assistance (e.g., Section 8). In addition to the protected classes under the FHA, the NJ laws extend protections to: creed, national origin, ancestry, nationality, age, pregnancy, marital status, gender expression, disability ad liability for US military service. 

The intentions of these two laws are to ensure that everyone is treated fairly when it comes to their housing needs and afforded equal opportunities. As a housing provider, we have a moral and ethical obligation to support this and do our part to treat everyone fairly. 

2) Americans with Disabilities Act vs. housing rules—know the boundary.
The Americans with Disabilities Act (ADA) Title III applies to places of public accommodation—for most landlords, that means areas like your leasing office or any space open to the public (not the private apartments themselves). Accessibility standards and service-animal rules in those public-facing areas come from the ADA. When we get to the inside of  residences and common areas limited to residents, the FHA’s reasonable-accommodation framework governs. This is why the FHA governs the rules around assistance or Emotional Support Animals (ESAs), while the ADA governs Service Animals, like seeing eye dogs. 

3) New Jersey Anti-Eviction Act = “good cause” only.
In most NJ rentals, you cannot evict a tenant simply because their lease term ends; you need one of the statutory “good cause” reasons (e.g., nonpayment, substantial lease violations, owner reoccupying the property, etc.), and you must follow strict notice and filing procedures. This is foundational to your risk planning and cash-flow assumptions. 

4) Security deposits: capped and regulated.
The New Jersey Security Deposit Trust Act caps residential security deposits at 1.5 x the monthly rent and regulates that those security deposit must be in interest bearing accounts in the Tenant’s Name (it is their money that the landlord is simply holding for potential breach of the lease). It also regulates that the interest must be paid out within the month of January for the previous year’s interest and a full refund or accounting of withholding due to lease breach within 30 days after moving out of the property. 

5) Landlord registration is not optional.
Under the Landlord Identity Law (N.J.S.A. 46:8-27 et seq.), owners of 1-unit and non-owner-occupied 2-unit dwellings must file a registration statement with the municipal clerk and provide a copy to tenants; multiple unit dwellings (3+ units) must register with the NJ Bureau of Housing Inspection. The specific forms used and type of inspections required as part of this process do vary from town to town. Keep proof—you’ll need it in court and for local inspections. It’s also a good idea to submit these documents via certified mail to the town clerk so you have proof of mailing should they get misfiled by accident.

6) Truth-in-Renting & habitability resources.
For many multifamily buildings, NJ requires distribution of the state’s Truth-in-Renting booklet to tenants. It’s also your quick reference on habitability and landlord-tenant basics—worth reading cover-to-cover when you’re new.

7) Lead-Safe Certification for pre-1978 rentals.
Signed into law by Governor Murphy in 2023, New Jersey’s Lead-Safe Certification law requires most homes built prior to 1978 units to pass periodic lead-safety inspections—at tenant turnover or on a two-year cycle—with certain town-by-town schedules. Depending on the town the property is located in, will dictate the type of inspection required, which is either a visual inspection or dust wipe sampling. If you buy older housing, plan and budget for compliance from day one.

8) Local rules: rent control, inspections, CO/smoke certificates.
New Jersey has no statewide rent control, but many municipalities do. Before you buy, confirm whether the town limits increases, sets notice rules, or caps vacancy decontrol. Also check for local rental registrations, periodic inspections, and smoke/carbon-monoxide certification requirements before each occupancy.

9) Fair Chance in Housing Act (FCHA): “ban-the-box” for rentals.
Effective January 1, 2022, NJ restricts when and how landlords may consider criminal history. In general, you cannot ask about criminal history or run a check until after you issue a conditional offer of housing, and even then NJ sets guardrails on what you may consider and the notices you must provide. Violations have led to enforcement actions—train yourself (and your team) on the FCHA process. 

What can go wrong (and how to lower the odds)

The other area we need to look at are some of the things that can go wrong and are usually related to an inappropriate action by the landlord. 

• Vacancy & pricing misses. This is probably the number 1 mistake we see landlords make. It’s critical that when we are putting a property on the market, that we have clarity on how the market is trending, what is the amount of inventory on hand vs demand and how does the property I am listing compare to other comparable properties in the area. Overpricing the rental by even $100/month can add weeks of vacancy and lost revenue. Study comps, seasonality, and concessions.

• Weak screening or illegal screening. Skipping income verification or calling a “personal reference” instead of an employer is risky—and illegal screening (e.g., early criminal history questions, voucher refusal) creates liability. A through screening process evaluates items such as: rent:income ratios, work history, credit and balance history, landlord verification, etc. To be FHA compliance, you need to use a written, compliant criteria list every time.

• Maintenance snowballs. Deferred maintenance becomes emergency calls. Do a thorough move-in condition report with photos, schedule seasonal servicing (boilers, gutters, smoke/CO alarms), and give tenants clear channels to report issues. In our experience, one of the key reasons tenants withhold rent payments is out of frustration that reported maintenance issues are not being resolved.

• Deposit disputes. Without dated photos, invoices, and itemized statements, you’re likely to lose a deposit dispute (and pay penalties). Ideally, you would have a comprehensive “Move-In Property Condition Report” and a corresponding “Move-Out Property Condition Report”. These reports would both be provided to the tenant, along with the itemized breakdown of what items are identified as tenant caused damage. In many cases, you have also have to make deductions for “normal wear and tear”, so this process gets complicated very quickly! Know the 30-day clock and interest rules; send a clean, timely itemization.

• Paperwork gaps. Missing landlord registration, lead certificates, or Truth-in-Renting proof can sink your position in court. Keep a compliance binder (physical or digital) with all required documents. In fact, if you don’t have an executed lease and proof of landlord registration, you cannot even file for an eviction in New Jersey.

• Fair housing complaints. Casual comments (“no kids,” “quiet professionals only,” “no Section 8”) can become costly charges. Use neutral, property-based language and standard processes. The easy test is to read your listing and ask yourself does any of my content speak to a “protected class”. 

• Rent control surprises. Buying into a rent-controlled town without modeling allowable increases can turn your pro forma upside down. Confirm rules before you go under contract.

A simple self-test to decide

So, we’ve reviewed the benefits of investing in rental properties; what can go wrong with being a landlord; some of the various laws that impact landlords; and now, we come to a few pretty basic questions to ask ourselves to ensure being a landlord is the right business for me. 

• Do I want to run a small service business? Landlording is customer service, plus facilities maintenance and legal compliance. Things will break and must be repaired.

• Can I commit to NJ’s rules? If the NJ Laws Against Discrimination, Anti-Eviction Act, security deposit law, lead-safety, and Fair Chance in Housing Act (FCHA) all sound like “too much,” consider hiring professional management from day one. 

• Do I have the right team? At minimum: a landlord-tenant attorney, accountant, licensed contractors, or (if not self-managing) a reputable property manager who has all the relevant connections and contacts.

• Can I be fair, firm, and consistent? Courts (and tenants) respond well to landlords who follow written policies, give proper notices, and document everything. 

Why Many Landlords Choose Professional Property Management

After reading through the legal requirements, risks, and day-to-day demands, you might be thinking: “Do I really want to handle all of this myself?” The good news is that you do not have to and is exactly why many New Jersey landlords partner with professional property management companies.

Here are some of the main benefits a property manager can bring to the table:

1. Compliance expertise.
   Property managers stay current on the New Jersey Law Against Discrimination, Fair Housing Act, Americans with Disabilities Act, security deposit laws, lead-safe requirements, local rent control ordinances, and the Fair Chance in Housing Act. They ensure your leases, notices, and screening processes are legally compliant—reducing your risk of costly mistakes.

2. Tenant screening and placement.
   They use standardized, lawful criteria and professional screening tools to find qualified tenants while minimizing discrimination risks. Some also handle marketing, showings, lease signings, and move-in inspections.

3. Maintenance coordination.
   Instead of fielding 2 a.m. emergency calls, you have a team coordinating licensed contractors, tracking repairs, and scheduling preventive maintenance—often at preferred vendor rates.

4. Accounting and reporting.
   Property managers handle rent collection, late fees, security deposits, and owner distributions, often with online portals so you have real-time visibility into income and expenses. Many also generate monthly financial reports and year-end tax summaries.

5. Evictions and legal notices.
   If a tenant defaults, professional managers know the Anti-Eviction Act procedures, notice timelines, and court filing requirements—often coordinating closely with landlord-tenant attorneys so cases are handled efficiently and lawfully.

6. Time savings and peace of mind.
   For landlords with full-time jobs, families, or multiple properties, management companies allow you to focus on strategy and growth rather than midnight lockouts or piles of paperwork.

7. Tenant relations and retention.
   Professional managers act as a buffer between you and tenants, handling complaints, lease renewals, and routine communications—often leading to higher tenant satisfaction and lower turnover costs.

8. Scalability.
   Want to grow from one unit to ten—or from one building to five? Property managers have systems, staff, and vendor networks that make scaling much easier than managing it all yourself.

Final thoughts

Being a landlord in New Jersey, or any state for that matter, can be an excellent way to build long-term wealth if you approach it like a regulated business: learn the rules, set clear processes, and keep strong reserves. The most successful owners use checklists, standard forms, and documented criteria; they also consult professionals early—before a problem becomes a violation or a lawsuit.

If, after this, you still feel energized by the idea of providing safe, compliant housing—and you’re ready to master the core NJ rules—you’re likely a good fit. If not, that’s useful clarity, too: you can wait, partner with a seasoned operator, or hire end-to-end management so you capture the benefits while reducing the headaches.

Either way, your next step is simple: pick one property you’re considering and pressure-test it against this guide—especially the compliance section and the “what can go wrong” list. A few hours of diligence now can save you months of stress later.

Helpful Links: 

• HUD Guidelines on Assistance Animals: https://www.hud.gov/helping-americans/assistance-animals

• ADA Accessibility Standards: https://www.access-board.gov/ada

• NJDCA Security Deposit Bulletin: https://www.nj.gov/dca/codes/publications/pdf_lti/secty_deposit_bulletin.pdf.

• NJDCA Landlord Identify Law: https://www.nj.gov/dca/codes/publications/pdf_lti/landlord_idnty_law.pdf