First Property - Inherited Tenants Paying Below Market Rent
Hello everyone, this is my first time actually getting a chance to really get out there in the discussions. I am under contract with my first property, which is a 4 unit building with inherited long term tenants.
Currently the tenants pay $475 in rent, roughly $75 under market rent per unit($550 for 2BR). At the moment, the current landlord pays water/sewage for which the tenants then reimburse him. On average the water/sewage bill per unit is ~$41mo.
I was hoping to hear how risky it sounds to raise the rent to $550 and cover the water/sewage bill myself without spooking off my current tenants. Any idea how to explain the price increase? ... Should I simply state "In order to be more in line with current market rents along with now covering the water/sewage bill for a more streamlined lease agreement, etc. etc."?