How To Handle Existing Tenants?
I'm thinking of buying a 3 family. The previous owner lived on the bottom floor and rented the 2nd and 3rd to family. Needless to say, the property is currently renting at way below the market value. How would a new landlord go about raising the rent? Each floor could be renting for 300-400 more/month.
Good info, thanks!
Quote:
On 2004-08-29 13:18, commercialking wrote:
If all the apartments are rented to family members I'd make some resolution of this matter one of the terms of sale. I'd start out with a .10 cap offer based on the current income. I'd explain why I made the offer that way. When the seller tells me that the want more I'd explain that the only way to get more is if the tenants pay more. If the seller wants to go back to the tenants and negotiate rent increases then I'd be willing to pay more.
"I'd start out with a .10 cap offer based on the current income"
I'm new to this - Whats that mean?
Thanks!
If the tenants are mo/mo, you can give them a written notice after you've bought the place that the rents will be increasing. Check your state laws to see how much time you need to give them, I think most are 30 days.