Increasing Rent to market value in non rent controlled 3 fam.

[Kurt Isaac]

My wife and I manage a 3 family in which 2 apts. were updated by us and we have quality tenants in the new apts. A third apt. is still rented to a left over tenant from when my wife’s mother owned the house. The rent of that apt. is $300-400 below market and we have not updated it (although the appliances are recent). The tenant pays on time and rarely gives us any problems but we still want bring the rent closer to mkt value. Any suggestions on the most diplomatic and financial way to get the rent up at least $100 periodically until we reach market rate. BTW this property is not rent controlled. Thanks in advance for your input.

[Peter M.]

I agree with @Mike Dorneman. A lot of people on here will tell you to just send notice because "you have to run it like a business" but to me that isn't good business. I am going though a similar situation now and I will be giving 3 of my tenants notice that in 6 months I will be signing new, 1yr leases with them (all m2m now) for $75 more per month. That will give them time to decide if they want to move out or stay. Hopefully they all stay but if one leaves I will update the unit and be able to rent it for about $250 more per month.