20 year tenant or unknown for more money

[Dawn Burwell]

My first buy and hold.( 2 houses for 49k )   Im inheriting a tenant that has been in place for 20 years. Her rent has not been raised since 1984. She currently pays 450 a month. ( plenty to cover my mortgage -440 - on both houses on the property)  However.  The rental amount for the area dictates that her rent should be at 700.   Seems a good idea to keep a long term tenant that has taken very good care of the house. BUT... I could really use the extra income on this.  As I have 2 houses in this deal to take care of . 

I dont HAVE to have it. Im house hacking my way off of disability ( with a roomate too) , and just need a way to have a home for now. Im torn between keeping a reliable tenant.... or getting a new one that would pay market.  Im not even sure I am allowed to raise her rent THAT much in a shot or even a year.   ( Pennsylvania )  

How would I even approach this poor old woman? Maybe I should just be grateful to inherent a good tenant??

[Ron S.]

Sounds like she's been there for a lot more than 20 years if she's been renting since at least 1984!

Let her know that you have to increase the rent to cover rising taxes and maintenance costs but that you want to keep her as a tenant.  Maybe you can structure a lease to go from $450/mo to $600/mo over 2-3 years to make it a smooth transition.  I say $600 because that's easier to swallow (33% raise vs 55% raise), then once you're at $600, it should be easier to get up to $700 over 2 more years.