Advice on making tenants paying market rent

[Alec Jacobs]

Good afternoon.

I am looking to buy a house that currently has a tenant who has been there for 10 years that is paying $575 for rent when market rent is around $700. I am confused as to how to navigate this situation. If I get the home and raise the market rent that seems pretty crummy for a good tenant who has been there for 10 years. But on the other hand someone else would probably not care and raise the rent anyway. I would love some advice about this situation.

Thank you!

[Michael Key]

If you never have vacancies, you aren't charging enough.

I first ran into this when investing in Boise, Idaho in 2016. Boomers had tenants they never increased the rents on paying 500 bucks when PITI at the time was around 900-1000 bucks a month and market rents should have been 1200-1500

To be honest, being kind does a disservice to people.