I just purchased 12 more units and don't know how to raise rent..

[Nate Julian]

Currently I own 16 units in Utah. 12 of those 16 we just inherited and these new units have came with their fair share of "honey do's". We knew that going in, and they are going to be awesome once we are through the stabilzation period.

We are at the point where we need to raise rent on the tenants living there. All of these tenants have leases that were inherited from the previous owners, or property manager depending on when they signed a lease.

Some of these leases are month-to-month, some of these leases are extending out further through mid to end of 2017.

My question is do I sign new leases and lock the tenants in for another year, and raise rents shortly thereafter, or do I just sign new leases with all of the tenants at the new raised rate?

Not sure what the best approach, or if anybody has any advice???

[James Masotti]

@Nate Julian -  If the rents are below market for their current condition regardless of any improvements needed...then by all means raise rent on the current month-to-month occupants. 

If you need the units vacant to do the updating required then let the month-to-moth expire and start doing the updates (assuming available capital after the acquisition) once completed then rent for market rate. 

The longer leases will obviously need to stay...which isn't a bad thing so that you can figure out how things are going with the month-to-month folks and use them as trials to gauge the level of repair and rent which you'll be able to fetch. That way when it comes time to work on the others you can renew their lease at the higher price, but they will be required to move into one of the renovated units that way you can now have an empty unit which needs renovating.