Under Contract, current tents have no lease

[Joe Martin]

I'm under contract and recently found out that the current tenants do not have a lease and are paying far below fair market value ($800 vs $1400). Needless to say, I feel they are not going to respond favorably to my dramatic increase in rates. This property is in an amazing school district so I'm not concerned about finding renters willing to pay $1400. Does anyone have experience in this type of situation? Any key watch outs or ways to protect all those involved and the property would be greatly appreciated. 

[Thomas S.]

Approach them with the new lease and be understanding in allowing them a descent amount of time to move out. Tenants always expect rent hikes with new landlords as most landlords are sloppy and allow rents to fall behind. They foolishly think they need to keep the rents low to hold onto "good tenants".