Raising rent on inherited tenants
Hello fellow investors!
My question is about how you would communication a rent increase to a tenant I inherited when I purchased a property.
The Duplex is located in an ‘A’ neighborhood and both sides were occupied by long term tenants when we closed. One side went vacant and was paying $800 per month and I was able to rent it at $1075 (which is about $100 less per month than comparable properties, but the unit went vacant right before the holidays so I had to get competitive.)
The other side of the duplex has a family of 3 and has the same square footage, but one less bedroom. They currently pay $850 per month.Other than the fact that they are pack-rats, they are the best tenants a landlord could ask for. The occupied unit needs some work, but fixed up, I could re-list it at $1100. I think a fair rate for the unit in its current condition is around $975.
Their lease is up January 1st so I want to give them notice. Would you write a letter outlining the reasons for the rent hike, call them, or tell them in person? And also, do you feel a $100 per month increase is excessive in this situation?
Any input would be appreciated!
Regards,
Tony