Purchased my first house hack with tenants need advise

[Tyler Lyren]

Hello Everyone,

So here is my situation. I just closed on a split level duplex that is currently fully occupied on month to month terms, my first property! I intend to move into the property. The units are severely under rented currently bringing in $1050 when the market rent is $1400-$1550. Both tenants expressed interest to stay before closing. I prefer to live on the bottom unit but if the bottom is willing to pay market rent versus the other wouldnt id want them to stay. My question is how would you go about finding out which one will pay more? I dont want to create a bidding war by any means and I do realize that would be a huge % jump in rent but they been getting away with a huge bargain.

Different options I have been thinking of.

1. Giving the notice to vacate on the bottom and then giving notice of higher rent on top.

2. I ask the bottom if they would be willing to pay 1500. If yes, then I go ask the top the same thing and if they say no I give them the notice to vacate. If bottom says no just move into the bottom.

Is it okay to say increase the rent 300-400 on a current tenant? A colleague of mine suggested letting them know you intend to make it 1500 but make incremental increases of say $75 every 3 months till you reach market rent.

Any input on what you would do would be greatly appreciated! I thank you in advance!

Tyler

[Andrew Postell]

@Tyler Lyren what type of loan did you use to execute on this property?  Are both of the tenants month-to-month or something?  If not, when do their leases run up?