Question about rent increases

[Justin Pereira]

Hi Bigger Pockets

 I bought my first multi family in April. I inherited the first and second floor tenants. First floor pays 1100 and second pays 800. Market rate for this two would be 1300 and 1100. There were some issues with the house I took care of that benefited those two units. I was thinking of raising rents 50 dollars per month per year. But I’m not sure seeing as I’ve never done this before. The first and second are family and handle snow and grass. They also use the basement and garage for storage. Some have suggested as little as 25 a month and some have suggested getting them right to market rate. The market in this area is going crazy and similar houses are selling for almost 100k more than this same time last year.  Any feedback from seasoned landlords would be appreciated.

[James Mcsweeney]

I think you get your market rent. If you are at market, then the tenant is not going to move to the same or similar type property to get the same rent. If you want to be nice, give the tenant the option of signing a long term lease with a moderate rent increase. If the tenant refuses the long term lease, you have to move it up to market.