Raising rent!

[Louis Roggeman]

Hey guys! So my partner and I found a place that we think we like. It's a 4 unit in Dunmore PA. All the units are rented, but the rents are about $100 less than where they should be. Does anyone have experience with buying a turnkey property and raising rents on tenants. Of course we don't want to be on bad terms with our tenants. We want to upgrade their apartments as well so I hope they aren't too upset with a raise in rent. Any idea how to go about it? I'm in the process of getting all the info on how long they are in contract with the current landlord. I believe its year to year lease. They have all been tenants for less than 2 years. Any advice is greatly appreciated!

[Douglass Benson]

With the last two buildings that we purchased (a 20 unit and a 17 unit building), we wrote a letter to each tenant detailing what they are currently paying and what the current market rate for their unit was.  It made it easy for them to understand why I was raising the rent and also helped them to know what was waiting for them if they decided to leave.  All the tenants were either month or month or had no lease in place whatsoever so it was easy from a legal perspective to do so.

I offered them nothing in return other than superior service compared to the prior owners and a better building due to the new tenants that we would bring in.

For both buildings, in less than 10 months, what used to be the largest rent payment is now the smallest rent payment and both buildings are full.

It isn't personal, it is only business.