Best way to Raise rent

[Carson Plant]

Looking at buying a triplex and would like to raise the rent. Each unit pays $600 and if I buy it would like for it to be at $850 per unit. Is there a law on raising the rent?

[Nathan Gesner]

1. Know what your law allows. I believe you can increase rent without restriction in your state but verify this.

2. You can't raise rent if the tenant is under a term lease agreement. If they are on a month-to-month, you can raise the rent with advanced notice of 30 - 60 days. Again, check your laws on this.

3. If you are able to raise the rent, do it at the earliest opportunity and do it all at once. Don't tell your tenants you will raise the rent in six months or that you will raise it in small increments over the next year or whatever. Give them 30-60 days notice that you will raise the rent to market rate and they can either accept it or move out. Honesty is the best policy for everyone concerned.

4. Even if they accept it, they should still be screened to ensure they meet your criteria. The only acception to this is if the previous owner can prove they were screened and that satisfies your standard.

5. Get an estoppel agreement!!! This is a simple form filled out by the Landlord and Tenant to ensure you are buying what you think you are buying. It will confirm rent rate, lease terms, deposit amount, any verbal agreements between the Seller and Tenant, etc. Just Google "estoppel agreement" and you'll find plenty of examples. It doesn't need to be fancy but this should be completed during your inspection phase and then matched to the lease agreements. It will protect you from a lot of problems after purchase, trust me.