Raising Rent on Newly Acquired Property

[Larry Nielsen]

I own rental property but I have had them for a while. I am now looking at a property that is tenant occupied going to a month-to-month in November. Its a long term tenant who has not expressed interest in leaving. The rent is currently about $500 less per month than what my research tells me it could be for this property. I know this is a business but advice on purchasing a property and wanting to raise the rent up to fair market from being so much lower? I appreciate any feedback from investors/landlords who have actually experienced this about how they handled it. Thanks in advance.

[Nathan Gesner]

Quote from @Larry Nielsen:

It's actually quite simple. You buy the property, you give the tenant notice of a pending increase, they pack up and leave, then you spruce it up and rent it at market rate so it's a profitable investment.

When egg prices double, do you think the local grocer cries in his coffee every morning about how inflation is impacting his customers? No. It's not his fault the market drove prices up. He's operating  business, taking the risk, providing a service to his community.

Your tenant should be thankful that he saved so much money over the years, but he's more likely to feel entitled and that his rent should never increase. But that's not your problem. 

If the tenant wants to stay, verify he can afford it. Offer to give him a slight discount if he stays, certainly no more than 10% below market. He can stay and pay, or he can go and pay someone else.