Would you increase the rent of this tenant?

[John S.]

Hello everyone - looking for some feedback.

I just purchased a duplex side-by-side (Each side = 3br2.5ba and are basically the exact same copies of one another). Paid cash, so no mortgage. 

Tenant 1 = $3,200/month (Section 8)

Tenant 2 = $2,700/month (cash)

Tenant 1 just moved in a few months ago and is paying $3,200/month (Section 8). 

Tenant 2 on the other side has supposedly been living in her unit for 20 years, and she currently has a roommate. She pays $2,700/month cash, so $500 less than the Section 8 tenant on the other side. They keep the unit in okay condition. She's $500 below what the rent is paying on the other side of the duplex. In the area where this rental is, there's no 3bedroom units for less than $3k/month, and I already know Section 8 will pay $3,200/month. 

My thought is to approach her by saying that my original plan was to purchase the property and convert her unit into Section 8 so that I could get the $3,200/month rent -- but since she's a long term tenant, I would be willing to forego that plan and tell her she can pay $3k/month to stay.

What are your thoughts?

[Clayton Silva]

Most of my costs are incurred when I have turnover, if you have a tenant that has been there for 20 years, I would not rock the boat much. I would do 5% (ish) increases year over year until I got to the desired rate.  Try to keep the tenant for 20 more years would be my advice personally.