Rent Increase in Multiunit

[Brandon P.]

Hello,

I have an inherited a tenant. They have been this same place 9 years. It is multiunit. 

They are payment $363 a month in rent the other 2 tenants are payment mid $400. The previous owner of the property very rarely raised the rent on him. 

He was early on his rent this month. I want to raise the rent on him next month ( April) to $465  and Today is March 7th. Is  too little time to give him advanced notice? and is 465 ( which is around market rent)  its 28% increase in rent.  Im concerned about his reaction. This place does not seem that easy to fill and Im having a little trouble trying to word the letter that I am going to send him. He is an older guy probably close to retirement. Its a $100 a month increase :/ He is  on a month to month lease 

Please provide some suggestions on how I should word the letter to him and another suggestion 

Thanks!

[Shain Ismailovski]

First, check local laws and regulations about any restrictions on rent increases. I would give them an incremental increase first and give them a bit more time. I would see if he is willing to switch to a yearly lease and let him know rent will be going up . A $100 increase can shock a lot of people and may cause you to lose the tenant. If the area is tough to rent in vacancy can be a killer. Start with a small increase first and give him 60-90 days notice even if you don't have to as a curtesy. You do want to be at market value, but you also don't want to lose monthly income due to vacancy. 3%-5% increase is pretty common and you can repeat it yearly. It's a slow drip, but is easier to swallow from the tenant side.