Buying a Duplex, owner occupied and I need to increase rent

[Robyn Imperatrice]

I am buying a duplex and we close on April 13th. We are moving in on one side and inheriting the tenant on the other. The tenant who is moving out has 90 days, which is till June to do so. Both tenants are on a M2M lease. One tenant is paying 800 and the other is paying 850. I did some research on increasing rent, but it leaves me a little confused. 

When they sign MY new lease I don't mind staying on the m2m lease, but I do need to increase rent. I would like to increase to 950-975. I would like to do higher but I know that would not be smart. 1250 is my goal rent. I dont plan to increase rent on the tenant moving out either. That will just cause unnecessary issues. When I looked up m2m rent increase in Oregon, they say you cant increase rent until after the 1 year, and then it gets fuzzy after that on raising rents. 

From what I understand, I can raise rent when they sign my new lease and then I need to wait a year. Then I can only increase once a year at a 9.9% increase. Am I understanding this correctly?

[Cody Paratore]

Robyn,

I live in Keizer and am in the same boat. Inherited tenants under market rent and on M2M leases. County does not matter unless you live in Portland. 

Here is how it would look for you. You get a new lease that reflects your terms and ownership. But the person still technically has lived at the property and is not a new tenant. So you may only raise the rent the 9.9% Max. But you also need to check with the previous owner and see when they last raised rent. Because you can only raise it once in a 12 month time frame. So, if the pervious owner raised rent in January of this year, you would have to wait until January of 2022 to raise rent. You also still need to give them a 90 Days notice. 

The only way to get higher than a 9.9% increase is when the tenants leave and the unit goes vacant. They rent control does not apply and there is not limit to how much you can increase. 

If you have more questions feel free to PM me and we can talk. Would love to network with other investors in the Valley and congrats on your new home!

Here is where you can find the Oregon Law about rent increases. https://www.oregonlaws.org/ors...