Long term tenants, below market rents

[Doug Willis]

Currently in escrow on a 4 unit in Ohio. Tenants are long-term, and rents have not been changed in about 5 years. The owner pays for gas and water. There is a 60-day notice required on any lease changes. Most of the media reports are that heating costs will significantly increase this year, so I am hoping to introduce a solution to help address these increases. I am hoping to get some recommendations on the following:

Option 1 - do not change anything for 3-4 months until there is an established relationship with the tenants

Option 2- immediately impose at least a $30-$40/month increase mainly to address the utility costs and leave tenants on a month to month.

Option 3 - again, wait for a couple of months and stagger rent increases ($50-$60) to the tenants which will still be well below market rents.

Certainly open to any other recommendations.