How to Increase Monthly Rent

[Devarra P.]

My question is similar to Robert Morgan question/post on rent increases.

I am looking to purchase my first property, tenants are already in place, and the properties I am looking at these tenants have been in place for 2 years or more. Each property from what I have researched, the rent is below market rent, and the range of difference is b/t $75-$230. I don’t want to go into my first property in the negative by losing him/her. How can I increase the rent and not lose the tenant.

Please advise.

[David Krulac]

@Devarra P. 

Vacancy is a very costly and underestimated expense.  And I don't like vacancy either.

Here tenants are protected by state law from any rent increases until their lease expires.  Month to Month you're good to raise rents with 30 days notice.

I've been renting properties for a long time. I prefer to NOT inherit tenants and select my own. but I'm mostly dealing with SFH and small MFH. This doesn't work when you're talking larger MFH, you would want to get a 100 unit building all vacant to start!

But over the years I have inherited tenants.  One time I got a tenant in place who was paying $550 for a 3 br place.  The rent was way low.  At the first lease renewal I raise the rent $200 a month (36% increase).  There was bitching and even some outside authority figures called me to complain.  I said that the new $750 rent was still below market rent and I would not budge.  I said go look at out places and if you find a better place then move!  The tenant stayed for 5 more years through subsequent rent increases until they bought a house.