What Would You Do Here

[Account Closed]

Came across a property that is only being rented for 750, but rental comps say it should be rented for 1000. Deal could realistically make sense at 1000 but not at 750. I'd have to go through the rest of the lease at 750, and then the tenant would most likely leave rather than take a 33% rent increase. I'd have to pay all the costs associated with turnover. Plus I'm concerned about trusting the rental comps when the property has only demonstrated it can get 750 in real life.

[Thomas S.]

If the numbers are right you should go for the maximum rent increase. Assuming you work with the tenant and give plenty of advance notice there is no reason you should have any vacancy. Give them 2 months notice of the increase if they decide to leave you have 2 months to find a better tenant. This is a no brainer assuming you can confirm your numbers.

Try running a test add with a description of the property and area to gauge the feed back. Just tell every caller the place has been rented.