Raise rents on long-time tenant?

1 Reply

Hey Everyone!

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?

Thanks!

Brad

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.