I will be closing on three duplexes on February 1. I have been out of the investment property game for about 15 years. Five out of the six units are below market rents by greater than 10%. I cash flow as the rents sit right now, but I definitely plan to increase those rents. I fully plan to create a plan to do so, just am curious what works for you guys?
Hey @Brian Zingler , congrats on getting back into the game and closing on a property! Here is what could happen. If you jack up the rents to current market rates you will most likely lose those tenants and have a vacancy. If you need to do any repairs/refresh, this would be a good time to do it. You could also raise the rents by 5% per year and hope they don't decide to move out.
I would do the math to figure out if losing 4-6 weeks of rent is more or less than 12 months of a 5% increase in rents. Also, make sure you stagger the rent increases just in case everyone decides to move out.