Newly Aquired 10 Unit - Existing Tenant's Rent Level

[Brian Karlow]

Hello BP

So we have successfully closed on the project and distributed our welcome/intro letter as the new Owner/Management.  We have two tenants who are up for renewal and would like your opinion on how to proceed with their renewals, as they are both around $200 under current rates (paying $750 vs $950 market)

Tenant #1 - Now under a M2M lease because she did not agree to sign a 1 year renewal with previous owner during the purchase period.  Also did not sign estoppel certificate during the acquisition ( although Owner did warranty deposit and rent rate) and has expressed desire to potentially vacate in 3 months. She lives by herself, is in her 50s and has been a very good tenant for 3 years. 

Tenant #2 - One year lease expiring April 30th 2017. I have not had any direct contact with this tenant.  She lives be herself, is in her 60s and has been a very good tenant for 4 years. I have not confirmed her intentions to renew but I am fairly certain that is her plan.  The building is almost an entirely older tenant base with an average stay of 8 years.

In order to provide proper rate increase notification for May 1st, I need to issue notices today. My approach is going to be to offer 3 options ( Thanks for the tip Brandon Turner!)

one year term = $836 (approx 10% increase)

6 month term = $876 (approx 15% increase)

M2M term = $912 ( approx 20% increase)

We really value and appreciate your feed back and suggestions!  Thank you in advance for sharing!

Brian