Investor · Louisville, KY · Member since 2017 · 102 posts · 80 votes
I'm purchasing a 4plex. My goal is to move into one unit, fix it up, rent it out....and then repeat with other units as the current tenants leases are up. The first lease isn't up until March 2020. As long as they are good tenants, I would offer them the fixed up unit (that will probably be $250 more than their current rent), but if not..I wouldn't renew their lease.
In the meantime, I am planning on raising the rents on all units as their leases are renewed (only by $50). My reasoning is because they are currently under market value and initially I will be doing some upkeep on the deferred maintenance of the house, putting in a security system, and cleaning up the common areas.
Rental Property Investor · Shakopee, MN · Member since 2015 · 985 posts · 374 votes
6y
It's always a good idea to tell them ahead of time. That way they aren't angry or shocked with a sudden increase in rent. You may lose some renters in the process, but that's part of being a landlord. Being close to the holidays I would suggest waiting until after the new year to do any increases in rent.
Marshall, MN · Member since 2018 · 64 posts · 30 votes
6y
@Justine Scheuher check what is in the current lease that the tenants have, what are the state/local laws, are the tenants month to month? Typically it is at least 30 day notice for not renewing or an increase in rent for renewing the lease.
As for raising rents, typically the lower the percentage of increase in rent, the more likely your tenants will renew.
Investor · Louisville, KY · Member since 2017 · 102 posts · 80 votes
6y
@Michael Stutelberg Yes, local laws here say 30days... but I guess my question is--should I tell them now what my plans are? (ie. fixing up the units one at a time)?
Specialist · Lakewood, CO · Member since 2014 · 1k+ posts · 1k+ votes
6y
@Justine Scheuher it depends on the type of landlord you plan to be. Personally, I would tell them since they are also my neighbors and the tenants I typically prefer like to know I am investing in making the place nicer. I would not talk specific numbers because those may change as you start to understand who is a pain and who is saving you more than that $50/month by taking great care of things. Other landlords want their tenant to know they are a tenant and will follow as close to the specific deadline dates as possible because they want their business to be impersonal and have as clear lines as possible. If you are within the landlord/tenant laws of your state, everything else you do is just how you like to run a business.
Rental Property Investor · Shakopee, MN · Member since 2015 · 985 posts · 374 votes
6y
It's always a good idea to tell them ahead of time. That way they aren't angry or shocked with a sudden increase in rent. You may lose some renters in the process, but that's part of being a landlord. Being close to the holidays I would suggest waiting until after the new year to do any increases in rent.