Taking over a rental property

[Keith Martin]

Hello all, I’m currently in contract to purchase my first rental property (multi family home). I was previously told that the tenant that’s currently renting pays $1800 a month, then when contracts began I found out that the tenant pays 1100 a month. The market for that type of apt is at least 1600 a month and they have backyard access. I plan on raising their rent once I take over. What’ll be the best way to go about it?

[James G.]

@Keith Martin You could immediately raise the rent once the tenant's lease is over if you'd like, but expect a turnover if you do this. Another option would be to increase the rent a little bit at a time, but with a rent difference this high, I would recommend raising the rent immediately. Make sure to do things right from the beginning, because tenants will start to run their own operation if you don't. Hope this helps.