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I'm just starting out in my real estate endeavors. I have a property I'm purchasing and I need to raise rent by about $100 to have it decently cash flowing. The property has a great tenant who pays on time. (I'm struggling to understand if this is a deal or not). Has anyone had experience with raising rent this high? For the area it's in the rent is low compared to what I could be getting (some homes in the $1000 to $1150 range). Any feedback or help would be much appreciated.
Overall, it looks like you've account for the right variables, with the potential omission of lawn maintenance. I also include 3% of the purchase price as part of my initial costs to fund a CapEx account. Even though you've just set the money aside and it isn't really a 'cost', it will drive the initial ROI lower since investment increased.
If the market is at $1000 per month and your property is comparable with houses commanding that rent, then you should raise rent immediately.
Was your question based on having an existing tenant? Otherwise, raising rents on a listing would be simple. If the property is coming with a tenant, you'll have to honor their existing lease. I'd give them a heads-up that you'll be raising rent when the lease expires, however.
38$ cash flow ? total Waste of time and money
@Joe Hines Yeah my question was related to having an existing tenant. Makes sense giving the tenant a heads is my only option.