Repositioning Acquired Tenant & Unit in Multi Family Property

[Chris Stranad]

So I closed on my first multi a few months ago, a quadplex. This was the previous owners only property & he self managed. The property was fully leased far below market value so I have been expecting to update the units & raise rents as leases expire.

The one bedroom unit was on mtm for the past two years. I asked my property management co to get him on their lease asap, look to sign him for 12 month & to raise the rent by $25 which would still be under market for the unit. The tenant responded saying that the unit is "very cold" & "uninhabitable" half the day during the winter & doesn't think paying an extra $25/month is reasonable & said that when he used a space heater the previous owner gave him a discount on rent due to tenant paying higher electric bill(I would loose money each month if I did this). Currently three of the units share a furnace(main floor is one unit & two upper units. Third unit is an addition on back of house on own utilities.) which I pay for heat for those three units, they pay electric.

So my question is, how should I proceed? I am thinking of having him, per his suggestion, sign a 2 month lease at $575 & not renew at the end of July. Then I can get into the unit, update a few things(paint, flooring/carpet) INSTALL ELECTRIC BASEBOARD HEATING & raise the rent for the next tenant to somewhere between $725-$775(avg in the area is $780 for 1brm). Hopefully complete the update & get a new tenant in the unit by August/September to be on a better calendar schedule/timing. I will do the same with the other upstairs unit & this will essentially split up all the utilities to be under the tenants responsibility, cutting my cost & increasing my profit margin.

Anyone have any insight or experience with baseboard heating elements. Thanks in advance!