Inherited Tenants Lease/Rent Raise

[Andrew Kessler]

For properties with inherited tenants that are currently on month-to-month leases how do you personally go about the leases in place/rent increases?

If the tenant is month-to-month do you have them sign/agree to your lease upon taking ownership or continue with the one that is already in place? (My lease is more thorough and has been reviewed by multiple attorneys).  My plan is a gradual rent increase over 3-6 months to move up to market for this specific example. 

My thoughts are to bring documentation for the first rent raise and our lease agreement to the tenant upon taking ownership. 

Any feedback is greatly appreciated, thank you! 

[Taylor Dasch]

If they have been in good standing since occupying the property, My personal plan would be to just raise it to slightly below market value (-5-10%) right away. If they want to stay then great, you have a stable tenant in place and dont have to waste time marketing the property. Then you can raise rents a little higher next year when it is time to renew the lease. If they dont want to do it then they can find a new rental at market value and will probably have to pay more in the end when they consider moving costs and likely losing some of their initial deposit.  Showing them comps on where the market is will help them understand the increase, especially if they are significantly under market value.