Raising Rent on Pre-existing Tenants

[James Lanier]

Hello everyone,

I am closing on a three family unit next week. The first floor is 3 bedrooms with washer and dryer in the unit (1,000 rent). The second floor is 3 bedrooms slightly smaller without washer and dryer (850 rent) . I plan on occupying the third floor. I did research for the 2 units and they are extremely below market value (3 bedroom in my area median is 1,350). Now while I don't plan on charging 1,350. I do plan on charging 1,150 for the first unit and 950 for the second unit. I am looking for suggestion on how to make this change after closing on the property.

Thanks,

James  

[Bryan O.]

@James Lanier When you close, you go around and introduce yourself. Ask if there are any outstanding issues that the prior owner did not resolve, let them know what your plans are for any fixes/upgrades in the near future, and let them know you will be providing them your own lease on xx date which will include a rent increase. It sounds like you are already planning to go below market rent, so just do it and be done. They will probably stay if there is nothing comparable at that price. I wouldn't take them to some fast food place, just do it at the property. Be professional, and then get back to your life. You are their landlord and you have a responsibility to be just that for them.