I just bought my first 3 family... I'm so excited.

[Peter Goeller]

Hello BP forum. I just bought my first three family house In Lancaster Massachusetts, I'm very happy that I was able to pull it off. It came with one set of tenants who have been paying 750 per month which is very low for the area. The heat and hot water are included so I told them I was going to raise the rent to 1000 in a few months but today I just found out that the previous landlord was also paying for the electric. Should I / can I raise it even more or should I honor the 1000 I told them.

[Kenneth Garrett]

@Peter Goeller

Congrats on your purchase.  Is the increase to raise rent to market value and/or to cover heat?  If you have a 3 unit how are you splitting utilities.  Using a RUBS method, per square foot method, per person, etc.  check your state law.  In Illinois you are limited on utilities especially if it’s all on one meter.  If it’s not in the lease you cannot charge unless mutually agreed between both parties.  I would honor your word if you told them heat only then address the electric next year.  Check out what other landlords are doing.  Is it typical the utilities are included in rent and what tents are they collecting then?   Analyze your market so you don’t price yourself out.  I do this in my market to make sure I’m competitive.