Can we raise rent in a newly acquired home with a M2M lease?

[Chad Bartlett]

Hey, everyone!

We are going to be closing on a duplex at the end of the month (IOWA), and one side of the duplex is below market value.  We would like to increase the rent of this unit, but the current tenant has a month-to-month lease with the existing home owner.  

Can we do this? If so, are we just drawing up a new lease in our LLC's name?

Any help would be appreciated.

Thanks!

[Joe Splitrock]

@Chad Bartlett I would recommend getting the tenant to sign a new MTM lease at current rent. Then wait a couple months until it is closer to summer and send a rent increase letter. I say this for three reasons:

1. It is easier to get the tenant to sign your lease agreement if it is cost and term neutral to the current lease. You are just "getting them on your system".

2. Summer is a better time to lease in cold parts of the country. That means if they choose to move out, you should be able to easily rerent at top dollar. End of April or May is a good time to send the increase. 

3. This gives you a couple months to evaluate the current tenant and determine the appropriate increase amount. You may even choose to push a non-renewal.