Rent Increase When Purchasing

[Joe Martella]

Hello Fellow BPers!

This is new territory for me.  I currently have a property under contract in NJ.  It is currently rented at $850 a month on a month-to-month basis.  The cashflow is not as high as I would like at $850 - one major repair would kill the annual profit.  I am scheduled to close mid June. 

I met the current resident who is a single mom that has been there for  6 years and is looking to stay.  I do not know if she is on any type of housing assistance.  The going market rent is $1,100 - $1,200.  I have two questions:

1.  If she is on housing assistance, can I just give her a lease for $1,100 a month?  How much notice do I have to give?

2.  If she is not on housing assistance, I will be gradually increasing her rent annually.  Since I would like here to start paying $900 a month ($50 raise), should I ask the seller to provide the tenant the required 30 day notice?  This way the tenant can decide if she will move or stay?

I never purchased a property with a tenant before, all my properties have been vacant.  I am not concerned if the tenant moves out as there is a demand for renters.  

I look forward to hearing from you all!  Thanks in advance for your input!