Inherited Tenants with Low Rents Question

[Kris Fox]

I've got a package of 3 SFRs under contract.  All 3 tenants have been in the houses for 10+ years and have not seen a rent increase since they moved in.  

Current rent is $700

Market rent is $1000-$1050 after I go in and spend a total of $10,000 between all 3 units on cosmetic stuff. 

From a financial point of view, it seems like a no-brainer to spend $10,000 to increase annual rental income by ($300x12x3 units) = $10,800.  My initial thought before doing this math was to just increase rental income by $100/mo for year 1 and then again for year 2 and again for year 3 until I got to market rent.  

My ultimate question is this...

Do I knock on their doors on the day of closing and present them with the new lease showing a $300/mo rental increase or do I gradually step it up?

[George P.]

i'd send them a letter saying "rent goes up $100 per month for a year". then gradual increase again next year. dont spend the money if you cashflow now. you'll lose 4k with just one turnover.