Strategy to increase rents to market rent

[Mica Moore]

I am looking into buying a 4-plex that has existing tenants in 3 units ( I plan to owner occupy unit 4). All of the occupied units are at $600 per month, but market rent should be $800 to $850.

What strategy can be used to get rents up to market rent?

i don't want to do a whole $200/$250 rent increase at once and then end up with 3 vacant units.

Do I just raise it $50 a month each year? Feels like that would take 4 or more years to get it to market rent though ( which is better than a vacant building). 

Should I be upfront with the tenants and tell them that the units are currently below market rent, and therefore, to expect annual increases? 

Not quite sure how to go about this.

[Nathan Gesner]

Quote from @Mica Moore:

You have one unit vacant. Focus on getting it rented at market rate, which will prove the value. Then get rid of any bad renters (even one late payment, lease violations, etc.). Move them out and rent that at market rate. If you have no more bad renters to move out, then approach the good renters one at a time with the rent increase.

I do not recommend incremental increases. Rip the band aid and put them at market, or get rid of them and put someone else in that will pay what it's worth.

If you have a perfect tenant you want to keep, offer to keep them 5% below market as an incentive. I wouldn't go lower than that. If they leave, find someone else that will pay what it is worth.