Is there rent control in Mesa Arizona?

Question

I am look to purchase a duplex in the city of Mesa Arizona and the currently tenants are only paying $500 and $600 per month. The going rate for the area is about $1100-$1300 per month.

when I purchase this property can I give a notice of increase of rent after 30 days or does the city of Mesa have a some form of rent control? Or is that just bad form to double the tenants rent?

thank you in advance for your help.

Linette Woodland · Answer

@Robert Vorhies There is not rent control in Mesa, but you would need to follow the lease they have in place. If they have a one year lease you could raise rent at the end of that term.

If I’m going to raise rent more than a little I like to give at least 6 weeks notice, although only 30 days is required. When I inherit tenants at a low rent I generally increase rent $200 and see what they do. I don’t raise all rents at the same time since I don’t want a vacant building. I just bought in Glendale with 4 units all paying $620. As each 1 year lease expires I raise them to $820. So far 2 have expired and both tenants stayed at the new price. I figured that if they left I would get about $900, but have to put money in. Good luck!

Doug McVinua · Answer

@Robert Vorhies As mentioned above Mesa, AZ is not subject to rent control but you should carefully review the leases on the property for conditions that might affect this situation.

Typically notices to increase the rent when possible need to be given to the tenants 30 days in advance of the renewal. In a month to month scenario notice needs to be given before the 1st (typical renewal date) for an increase in rent the next month.

You ask if this was bad form? Only if you really want them to stay at the current rate which is clearly not desired. As @Linette Woodland mentioned it's up to you on how much to increase and when as it's a risk-reward. With them being so far under your projections it would seem best to do it right away and be prepared that both might turn over.

Congratulations on your purchase, we currently have zero vacancies in the properties we manage, many of which are in Mesa.

On a side note be sure to evaluate the leases, deposits, have good inspections done, etc in your purchase cycle.

Kenny Dahill · Answer

@Robert Vorhies, if it's month-to-month then yes, you can increase rents.

Before renovating the units, why not raise the rents as much as possible without them moving out?  Or at least see what their limits would be.  If somebody is willing to pay FMV without you paying for renovations or vacancy losses, why wouldn't you at least try?

Robert Vorhies · Answer

@Jane Skulstad

That's a good point about the section 8.

Thank you.

Justin Ellis · Answer

@Robert Vorhies

I don't have any experience in this, but my gut feeling would be that if you double their rent, they'll leave and the units will free up for new tenants paying market rents. Creeping the rent up with the end goal of double in mind would probably just piss them off slowly and they will stop caring about the property. Might as well rip the band aid (If you can legally do it).

Bob Okenwa · Answer

@Robert Vorhies

Is there a lease already in place or is it month to month? If there is an existing lease, you will have to honor it. If it is month to month, then you can inform the residents of the increase in rent by sending them written notice that you will increase the rent in 30 days.

Jane Belmont · Answer

You can give a 30 day notice with any changes in the rent amount; however, there may be different rules if the tenant is Section 8 or uses HOMInc for example.  The City of Mesa pays a certain amount depending on the number of bedrooms per unit.  Check out the Section 8 information on the City of Mesa website.

Robert Vorhies · Answer

That what I would figure, but it's to go the check list.

thank you

Doug McVinua · Answer

@Robert Vorhies Tenant Deposits typically transfer to the new owner as it's still actually the tenant's money being held via the lease terms. Assuming the transfer of the leases, normally the deposits do as well. You should also be prorating rent etc.

You should be using an income property contract/addendum that clarifies such points as well as reviewing the leases, deposits, etc.

Robert Vorhies · Answer

@Doug McVinua

Thank you for that.

That is also a good point about the deposit.

Does the previous landlord give me the tenants security deposit or does that come out of my pocket?

Is there rent control in Mesa Arizona?

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