Increasing rent. Owner occupied duplex

[Jon Weaver]

Hey BP,

My wife and I recently bought our first investment property as a owner occupied duplex. We moved into one side and the tenants on the other sides lease is up Dec 31 2021. The current rent is about $400/mo lower than market rents. We sent them a new lease for 2022 for a little lower than current market rents. They replied and said they would go month to month after their current lease ends. My question is what can be done to increase the rent? Can I tell them that month to month will be the same rate as signing a new lease or will they legally only have to pay $1200/mo?  

[Scott M.]

Yes you can.  The current lease expires and if you are not going to renew it (and your not at the current rate) you can give them notice to either leave or that you are happy to do a month to month at X rate.  Then since they are not on your lease you should give them a new lease but simply month to month and then they are at the new rate and on your lease so a win win.  Just be sure you know the proper notice for your region.  Some require 30/45 or 60 days to give notice a lease will not be renewed.  Hold the current rate through the notice period (and end of lease) and beyond that they need to sign a new one / pay more or leave.  

Keep in mind they may chose to leave.  Be sure you have the funds and ability to get the unit turned and back on the market.