Raising rent on older, ultra long-term tenant

[Chris May]

I know there are a million threads already on BP like this, but I didn't see anything that quite addressed my question.

Has anyone purchased a rental that had an older tenant paying far below market rates? We're in contract on a duplex in North Carolina that has a 30+ year tenant paying less than half of market rate.

You hear stories all the time of greedy landlords buying property and kicking sweet little old ladies to the curb. On both an ethical and perception level, we have worked very hard to be sympathetic to the life situations of current and prospective tenants. On one hand, it's not really our responsibility to subsidize someone else's life, one the other hand, we don't want to put undue financial stress on someone who can't afford it.

Of course, we haven't even spoken to this tenant yet so she might be perfectly capable of paying more. Anyone been through this and have tips on how to handle it?

To make the numbers work, we really need to go up to at least 75% of market rate but I'm not sure what the best strategy is. Gradually over a couple years? All at once?

[Caleb Heimsoth]

Chris May you essentially answered your own question I think. Raise it gradually over a year is what I would do. If there’s a lease honor it obviously and then up it half the difference when the lease ends.

If they can’t afford this then, unfortunately they have to move on.

You need to treat this like a business (while being fair) or you will get taken advantage of