Updated almost 4 years ago on . Most recent reply
Newbie Landlord-How to Deliver a Rental Rate Increase
Hello everyone my name is Jason Willis and I am in the process of closing on my 1st property. It is a single family home in a great town here in Southeast Texas and I am looking for an answer on how to inform the renter of increase in the rent when I close. The current renters are wanting to stay in the property, they have been there for 2 years but the previous owner bought the house with cash and did not have the expenses I will have and had the rent WAY below the market for that area. They had no lease agreement at all. They have been given the notice that a new owner is in the closing process and will be requiring a lease agreement and will be making a few changes. Would someone happen to have some insight on how to handle this situation? Thanks!
Most Popular Reply
Hello and welcome to BiggerPockets. I would recommend offering the tenant three options. Use whatever numbers work for your market, this is just an example:
1. Sign a one year least at $1500 per month.
2. Sign a month to month lease at $1600 per month.
3. Give 30 days notice to vacate.
Another approach is having them sign a month to month lease at the current rent amount. This gets them to sign an agreement with little reason to object, because rent is the same. You can then wait a few months and send a rent increase in the spring (which is a better time to lease). This may be a better approach than raising rent day one.