Rental Property Investor · Valley Stream, NY · Member since 2017 · 5 posts · 2 votes
Hello BP Family!
Closing on my first Multi-Family Deal in Syracuse NY and it’s currently tenants occupied. The property has 2 units both with expired leases as we near closing, the current owner dId not want to issue new leases while the property was on the market.
The current rent is below the market average.
I was thinking of offering a new lease agreement with an increase but I’m concerned they would vacate. Not the way I want to start my Investor career.
The property will cash flow with the existing rent roll but I’d hate to lock in a tenant when I know we can get more.
What are your thoughts BP community?
Rental Property Investor · Central, FL · Member since 2016 · 950 posts · 821 votes
8y
my advice would be to adjust to market rent out the gate. Rather to take a little vacancy upfront versus a hit monthly. And once you accept the lower rent it will be harder to raise it. Show the tenants the current market rents in the area. It isn’t like they will be able to move to something else unless they “downsize”. I feel for you, the whole I don’t want my units empty right away. But rip the band aid off early.
Rental Property Investor · San Rafael, CA · Member since 2015 · 190 posts · 90 votes
8y
What part of the city and are they section 8? Also how much of a gap is there to market rent? And how do you know what is market rate? They will most likely not move for $25/mo but if section 8 they need to reapply/redo with the new rent, I believe. Otherwise the whole increase is coming out of their pocket. Another consideration is the current condition of the units. Is there a huge amount of work to turn them over if they did leave? Might be better to hold off unless you already have a rehab fund to do the work.
Rental Property Investor · Valley Stream, NY · Member since 2017 · 5 posts · 2 votes
8y
@Will Chamberlin
Thanks for the feedback Will, the property is in Eastwood a small town within the city of Syracuse.
The tenants are not Section 8, I received feedback on the local average rent from my Real Estate agent who is an active investor with the Syracuse Market.
I’m with you on the fact that an increase of $15-$25 shouldn’t lead to vacancy, if anything it will expose any tenants that are having issues with the current rent.
Good luck with your search in this area!
Manlius, NY · Member since 2017 · 13 posts · 11 votes
8y
Welcome to the business!
My 2 options:
1) Do the small $25-$50 increase - repeat
2) Inspect the properties. Who is taking better care of your new house? Keep that one and give the notice to the other. Later, move the new tenant in a freshly-painted apartment that demands market rent - repeat with the other apartment 3 months later
Option 2 is like getting the band aid wet and THEN pulling it off , like Eric C. mentioned earlier