Updated over 4 years ago on . Most recent reply
Raising Rent on Inherited Tennant
My wife and I purchased a duplex a few months ago to house hack and inherited a tenant that has lived here for 10 years. He is very low maintenance, pays on time. and I don't believe he has intentions of going anywhere. Perfect tenant, right?! However, he is currently paying way below market rent at $1400 (water and garbage included) for a two bedroom/ two bath/ and a garage in Everett, WA. There is a comp next door of similar size without a garage that just rented for $1700. I'm debating between raising his rent to $1550 (marketed as $100 increase with $50 fee for garbage/water) and including a 3% raise every year in the lease or not renewing, do about a $15,000 renovation, then rent it at $1800 a month. Any advice would be great!!
Most Popular Reply
Hey @Grant Hasting! I agree with @Rami Ibrahim about having an honest conversation with the tenant. When we bought our duplex, I put the inherited tenants on a 2-month lease at their current rent and told them that in 60 days the rent would be increasing and by how much. Told them the reasoning for it all and that I wanted to give them 60 days in case this increase would not work for them and they needed to figure out something else. The one set of tenants did not even bat an eye (had not had a rent increase in 7+ years prior), and the other set appreciated it and moved out about 2 months after the rent increase (with proper notice). Having a face to face conversation often seems like the best way to share what might be bad news to people. Best of luck to you!