Dealing with an Existing Tenant Below Market Rent

[Brian Washburn]

Hey Team!

I am looking for some guidance. Today I toured a property that I am looking at for a buy and hold rental. The property seemed like a real winner. 3BR ranch with walk-out basement and attached garage. The problem is that there is a tenant living in there who has been there for TWENTY YEARS and is only paying $550/mo rent. The average rent for this area would be closer to $1,300. 

I have purchased 3 houses so far, all of them vacant. This is my first time looking at a deal with an existing tenant. She seems to be kind of a shut-in, borderline hoarder, and has no intentions of going anywhere soon. She probably would not meet our tenant qualification standards.

This presents a pretty large ethical and logistical challenge. On the one hand, this looks like a great deal and I can't wait to put in an offer. On the other hand, this woman has lived there for 20 years and it would be pretty rough for me to be the guy who triples her rent and evicts her. Business is business... until you blow someone's life up.

Any of you more experienced investors have some creative ideas on how I can approach this? The numbers don't even come close to working with her current rental income. Thanks in advance!