We’re seriously looking into our first rental property (hoping to put in an offer next week once we have financing together). It’s a duplex with rents under market value.
How do we go about raising rents to market? Do we have to wait until the end of the lease? Can we entice the tenant by making improvements? Any other suggestions?
They seem like good tenants so I’d like to avoid them moving out especially with the slower winter months coming.
You can’t raise rents in the middle of the lease, but you could inquire if they are interested in moving before the lease expires, who knows, maybe they wanted to move anyway, then you could test the market with increased rents. Wait until after the winter months have passed and then pass along the increase when their lease expires.
Sometimes people are expecting it when a new owner purchases the property, and akr day know they are under market. I think Having a meeting with them is the best way to know how to proceed
Kim, correct me if I'm wrong but I believe you have to give a 30 day written notice once the lease is up, to increase the rent.
I'd say it depends on how under market it is. I am under contract for a bundle of 3 condos. 2 rent for $750. The 3rd is rented for $700. The tenant panicked about her rent potentially going up and has asked for a 2 year lease to lock in her rate. I agreed figuring a bird in the hand is worth two in the bush.