Inherited Tenants Have Rent Rate From 5+ Years Ago
Hey BP,
So I'm about to close on my first ever property the end of the week, yay! It's a two family in Northern New Jersey and I will be living in the top unit. The tenants are both month to month and I had to give notice of quit to the top unit so I can live there(FHA loan). I've been doing research since I first came upon this property as to the fair market rent to be sure that the numbers make sense. So the tenant is paying $1250(absolute steal for this area) and the fair market rent for all the amenities, space, and extras such as 2 car garage, full driveway privileges, small dog, and more $1650 is pretty on-point. The increase is definitely a shock and I've been given permission to give the tenant notice of increase before closing that rent will be $1650 upon my possession. She really wants to stay and I really would like the convince of already having a tenant but she's saying the rent is a little too high. I offered to replace her oven or refrigerator to soften the up in rent but curious of everyone's opinion here on BP. Has anyone been in a situation where they've had to raise rent so high(yes, there's no rent restrictions in the town) , if so what helped to make it an "easy" transition?
-Ryan
Most Popular Reply
@Chris Eaker there are other costs associated with turning a unit over aside from the month vacancy. Those costs tend to be higher in units where the tenants have been there for a while. More cleaning, more painting, more repairs, etc...