Increasing rent on new property

[Jonathan Santana]

Greetings BP!

We are in the process of acquiring a four-plex through an FHA loan and will be house hacking the property.

After assessing the market through the MLS with both properties that are up for rent and that have closed within the last 6-12 months we found that the current tenants rent are well below market value, Approx. $200-$400 below.

I have read about increasing the rent gradually over time in order to keep the tenants and not have a mass exodus. As far as increasing rent I know that there should be some upgrades to the property but the properties are in great condition and are current/comparable with all the other properties that have closed in the last 12 months for the increased rent amount. 

I am hoping to gain some extra nuggets of information about how to handle the current tenants and be able to bring up the rent to fair market value. We want to be fair to the current tenants as they have lived there for over 5 years but also need the numbers to make sense for investment purposes. 

Thank you all in advance for your time and input!

Best Regards,

Jonathan