How to Raise Rents?

[Adam Meckler]

Hey all! Im new to the game. Have had an Airbnb out of our primary residence basement for 2.5 years and bought a duplex in November after taking out a HELOC on our primary to use for the down payment and some renovations.

We also recently closed on a fourplex as a partnership with a friend. Used enirely OPM to buy this one, and borrowed money from a family member who is in commercial real estate to do the renovation. (I have experience raising money as a professional musician so this came somewhat naturally to me). 

The duplex is rented well under market rate ($600 on each side. 2-bed apartments), and the fourplex has two rented units on the lower half well under market rate ($475 on one side, $600 on the other also 2-bed apartments). 

Market rents in this area for those size units are closer to $1,100 (a little more, actually).

Previous owners owned these spaces for a very long time, so their taxes were low and those rents were manageable for them. These rents do not cover mortgage/insurance/taxes as it stands now. Plus, we're investing heavily in each property with the intention of doing a cash-out refi within two years of owning each one. 

OKAY. That's pretty much it. Any advice on how to raise rents? 

I was planning to send letters explaining the higher cost in taxes, market rents in the area, and then offer a gradual raise to meet in the middle somewhere. Yeah? No? Appreciate you all!!