So, I'm purchasing my first piece of rental property and the rent in the neighborhood is starting $1,100. The current tenants are paying under market value at $850. They are on month to month with no contract and I want to give the option to pay the $1,100 or vacate with a 30 day notice. How do I properly go by doing this? what Paperwork is needed? This is in Illinois, and I close Friday!
Thank you guys in advance!!
Have you taken the time to sit down and learn your state landlord tenant regulations. You will find the answer there.
You are required to know the regulations that govern your new business.
If the property is in Illinois here is a basic tutorial. May not be valid in Chicago or Cook County as they make their own rules up as they go along.
To raise the rent:
1. Make sure the property is not in some rent protected area before going to closing.
2. On a month to month you must give 30 days notice of a rent increase. A 30 day notice begins on the first of the month following the date of service. So if they are served served on the 2nd of September they have until October 30th to comply.
Rules are identical for a 30 day notice to terminate. Starts on the 1st of the month following the date of service.
In either case they need an immediate notice of change of ownership and direction of where to pay the rent.
Make sure the seller discloses all deposits and they are paid to you at closing.
If they move out you only have a limited amount of time to return their deposit or send them a notice of why it is being withheld. 30 to 60 days depending on the venue.
Good Luck and Good Investing. Need an attorney PM me and I can hook you up.
Is it worth losing two or three months rent to get them out and re rent the unit? Would it be easier to do a $100.00 increase this year and then ease them up to market? Talk to the residents before taking action. Think of options before you go meet them.