Should I raise the rent on current tenant?

[Zackary Martin]

I’m buying a duplex. One side is currently rented to a couple that’s lived there for the past seven years. They’re ideal tenants who look after the place like it’s their own. However in the time that they’ve lived there their rent has never been raised. They’re currently renting it for $750 and they pay their own utilities. The unit could easily rent for 1,000-1,100. I don’t want to lose them but I also don’t want to miss out on that much potential rent. What should I do?

[Alan Grobmeier]

@Zackary Martin., wow 7 years!  That's a LOT of lost income.

A general theory is a 10% or greater increase is basically a 'get out' signal.  So, I obviously would not do that.

What I PROBABLY would do is give them a 1 year lease @ $810.  This would get you back some of the money without a 'get out' signal.

The following year I'd go to $860.

3rd year is $920

4th year gets you to a $1000.

You need to consider if/when your tenant CAN pay that kind of money.

If you don't think they are willing or able to pay $1000 in the future AND you can truly get that NOW, cut them loose.