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Updated over 8 years ago,

User Stats

70
Posts
5
Votes
Konrad R.
  • Orlando, FL
5
Votes |
70
Posts

Help analyzing rent increase

Konrad R.
  • Orlando, FL
Posted

I purchased my first rental property (duplex) not too long ago. The previous owner was charging very low rent on one side. The other side was vacant (cash for keys). I spent a substantial amount of money renovating the exterior and the vacant side. I think I can get $950 to 1K a month rent. The other side is not renovated, but they are only paying $600 a month. I already purchased the central air equipment for their side, but I haven't installed it yet. They agreed to a small rental increase if I install the central air now.  They've lived there for several years and appear to be good tenants. They already knew that a rent increase was coming. I'm open to a renewal and holding off the renovation on that side.

It looks like I can get 750 to 800 (possibly 850) for that side with central air without renovating it. It looks like it will be around 12k to renovate that side including the central air. They are asking for only a 100 rent increase. 

I'm thinking about raising the rent to 750-800 without renovation. The renovation would bring in an extra 150 to 250 a month rent. There will be a vacancy period of 1 to 2 months. Therefore, the 1500 to 1600 would eat into any rental increase attributed to the renovation.

What are your thoughts on this? Is there anything I'm missing?

I feel bad that I'm making such a large rent increase, but I've already spent a lot on the place. 

Also, what is the appropriate amount of time to give notice of a substantial rent increase. They are complaining that I haven't told them the new rate and there is still 5 months left on the lease.

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