Inheriting new tenant for new duplex purchase

[Rosaria Pipitone]

Hi everyone!

Im inheriting what appears to be aloyal tenants for the duplex that I’m purchasing in two weeks. I plan on living in the duplex as well. According to the listing agent, Tenants had been living in the upstairs apartment for 8 years. Upstairs was recently renovated. It’s a 2/2 with brand new kitchen and bath. According to my realtor, rental goes for about 1k in that area. I’m thinking of raising the rent to $900 and asking the tenant to sign a one year lease.

Questions are:

1- Is that too much of a rent increase? My logic is that even if the tenants decide to leave, I can live upstairs and rent downstairs costing me $600 a month to live in my own house!

2- what is the best way to deliver the news to the long-term tenants? In writing? In person? By mail?

3- Any other tips with this situation?

Thank you!

[Michael Garofalo]

I agree with 100% of what @Richard Sherman said, that is all rock-solid advice! Only thing I'll add is you have to honor the terms of the existing lease agreement. So before you do anything, you need to wait until the current lease terms expire unless the tenant is on a month-to-month agreement. If this is a long-term tenant of 8 years and they pay on time and don't cause issues, you definitely want to hold on to them and should follow the strategy Richard outlined. Too much of an increase too quickly will give them sticker shock and may cause them to get emotional and leave once the existing lease expires.