Real Estate Agent · West Hartford, CT · Member since 2016 · 449 posts · 476 votes
Hi all,
Looking for ideas/suggestions on the best way to raise rents on a property my partner and I are acquiring. For perspective, this is a 7 unit Mixed use building, where every residential unit (6) is below market rent.
Current rent per residential unit= $750
Market Rent per residential unit= $1200
Going from $750 to $1200 is obviously a bit of a jump, our goal is to get them up to at least $1000. All units are turn key and updated, nothing cosmetically to do or change to justify the jump in rent. We have a 2 year timeframe to raise rents to do a successful cash out refinance.
It's such a big jump I highly doubt your current tenants will stay whether you ease them in or not. I wouldn't if I were in their shoes; back in the day when I was a renter and rent went up more than reasonable inflation I was looking for a new place to live. Nearly doubling would have been totally out of the question. Do local regulations prevent you from not renewing leases at the old rate and just going straight to $1,200? You can find out pretty quickly if the market will bear that with the first unit that comes up for renewal.
With that big of an increase, you will likely need to just rip the band aid off. Be professional and courteous, and provide 60 days notice prior to lease end dates that gives the option to the resident to stay at $1,200 or provide 30 day written notice of move out.
Also check your ordinances to see what is allowed.