new purchase, very low rents

[John Soforic]

Has anyone out there ever had a successful transition between raising rents SIGNIFICANTLY after buying rental units? I expect in essence to ask some very nice, elderly people to give up their "homes" and would like to do it with respect and dignity to them. Looking for advice from those who have been there/done that. The tenants of the duplex are paying $190 and $270 respectively, and the fair market rents in this area are $600 per side. Help? I can be tough and I have 30+ units, but I believe in reason and diplomacy first.

[Duncan Taylor]

Originally posted by @John Soforic:

One last thing not being said yet is... I really want them out. I would like to update all units, get appraisal and and then refinance for cash back. Just want ideas for a smooth transition, which may be impossible.

That was an important bit of information to leave out.

Given that, I would not do the staged rent increases. I will simply give the minimum notice required under the law increasing the rents to market rates.

If they move, you get to renovate. If they stay, you get the increased rents.

Alternatively, you could just give them a notice to vacate and do your renovations.

The next time you buy a place with the intention of renovating to refinance, just make removal of the current tenants a condition of the sale. Then the current owner can deal with the issues of removing the current tenants.