Long term tenant not paying enough in a house I want to buy.

[Josh Fralish]

Today is day one on Bigger Pockets!! I am going to sign on my first rental in a couple weeks in south Georgia. I drive by this house frequently because I'm excited about my future in real estate but today I noticed the neighbor just put his house on the market and it has a long term tenant in it. Further investigation shows that the tenant is only paying $400 a month for almost the exact same house I am about to close on. My manager/realitor is positive that she can get $600+ on my property. So my question is how can I get more out of the long term tenant? The 2nd house is a good deal but not at the set price the tenant is paying up now.

[Nathan Gesner]

Welcome to BP!

If your house is worth $600, it will rent for $600. It doesn't matter that the neighbor is renting his for $400 because it's not on the market for rent so it won't be competing against you.