Increasing Rent Process

[Andrew O.]

Good afternoon,

I recently purchased a fourplex fully occupied and all tenants are month-to-month paying under market rent. I want to increase their rent and I have a letter written explaining the increase, but I was told hand delivering it is the best way. The tenants either pay rent online or mail a check so I don't have a reason to go to any of the units. Should I just text the tenants telling them I have to increase rent and I have a letter I'd like to give them? I'd like to give them the news in person, but I'm not sure what to text the tenants to give me a reason to go to the fourplex? I'm looking forward to any suggestions on how I should give the notice.

Thank you!

[Richard F.]

Aloha,

If you haven't already, you should meet with each tenant (as New Property Manager, not necessarily Owner, your choice) to first of all see the actual condition of each unit, and secondly ask "what maintenance issues have not been taken care of by prior management, and are there any new issues not yet reported?" Only AFTER getting this info and considering its effect, if any, and, depending on how much you plan to increase rent, you should briefly discuss their intentions (we'd love to stay another year" or "we're planning on moving this summer"), and lastly your intentions, which you can adjust based on everything learned through these conversations.
If it's a reasonable increase, around 10% or less, advise them you will be terminating their current agreement at the end of the current term, and scheduling a meeting to sign your new agreement once they complete and submit a new application. If it's a big increase, you still advise them you will be terminating the current agreement, but will allow them 60 - 90 days to relocate if they choose not to pay the increased rent, pro-rated to last day of occupancy (based on when keys and possession are returned). They must leave unit clean and free of all personal property and rubbish. (If you plan on significant updates/redecorating, I advise them cleaning is not necessary, but does need to be broom cleaned, with everything out.)

If you already met with tenants and inspected each unit, simply send a letter or email giving them options. This assumes you have verified their preferred mailing address and email. Text messages are unprofessional and not satisfactory for documenting your business dealings. They are fine for coordinating meetings, but not for documentation! Personally, I would never provide my personal cell/text to a tenant, and very few owners. I only provide that to vendors I utilize, so they can reach me from a site when a problem arises or for approval of a repair.

Option 1: $$$ is the new rent, effective in XX days (per local laws), for a term of one year, or x months. Security Deposit must also be increased to match rent rate. Option 2: If you do not wish to renew, check this box, sign, and return as your xx (per local law) day notice of vacating.