I am looking at an opportunity and need some suggestions. There is a rental house for sale at $35K. The Zestimate is $74K. A tenant is living in it and has been there for 6 years and is paying $600 monthly rent. The Rentometer average is $800. Should I buy this house and immediately raise rents to $800? Should I raise them slowly over a couple years to bring them up to average? Should I even buy this house? It looks good and doesn't need any major work, maybe lipstick at most. What do you recommend?
It meets the 1% rule that some people use as a guide. How much are the other expenses (e.g. taxes)? Raise the rent, but a $200 increase is a lot and you may lose the tenants. Also check local laws to see if there is a cap on how much you can increase the rent by.