Buying duplex with current tenants

[Zack Whiting]

I have a duplex under contract with two long term tenants with 18 months on lease. It's a side by side brick ranch in a good area and it punches out to be a great deal if rented at average market rent.  The problem is the units are currently being rented for 200 to 300 dollars less then average market rent. The current lease does state that landlord can raise rents. Should I gradually raise rents? Raise them right away? Wait until lease is up? Current rents will pretty much put me at break even point after figuring in expenses. This is my first time buying a property with tenants in place and wondering what some of your guy's experiences are with this

[Joseph Bui]

I've bought multiple properties (mainly Detroit and Memphis) with tenants already inside. I like to look long term and keep stress and issues lower so I never raise rents immediately. After a year I will start to slowly increase rent. The last thing I want is dealing with an eviction and getting 0 cash flow. You also need to consider if losing tenants is in your best interested because there will likely be some rehab costs once they vacate, unless its already in really good shape.