Raising Rents!
I will be closing on my first investment property pretty soon now. (Tri-plex) The rents there could be alot higher the current rent there is:
1bed/1bath-$380
1bed/1bath-420
3bed/1.5bath-$700
These rents are very low for the area
1.Is it legal for me to increase the rents?
2.How long do I have to wait before increasing the rent?
3.How much would be to much for a increase?
I dont have a whole lot of experience in this so any info. would be gladly appreciated thank you TCI
1. Its legal assuming you're not in a rent controlled area or that the tenants do not have leases which lock in the rent for a specified period.
2. Again, assuming those things set forth in one you can stop and give notice on the way home from the closing. In most places you must give a month's notice. For example, if rents are due on the first you must give notice by the first of next month and the increase would be effective the following month.
3.too much is more than the market will pay. Be gentle. After all you don't want three vacant units. You might begin by giving notice on the unit you think is most under-valued, get that one done move on to the next. In this way the most you are likely to have vacant at one time is one unit.
You can go to http://www.myflorida.com they have the rules as to the percentage you are allowed for existing tenants. The fastest way is either to give them something for the increase or to get new tenants. In orlando the three bedroom wouldnt be hard to get a tenant, but the 1 bedroom's could take a while, so like the past post stated be gentle. You can get around the rules a little bit by having them sign a new lease, but to keep them happy, I would rehab there place and add something, like a washer/dryer combo, or ceiling fans, a communal jacuzzi, etc etc. If you keep them happy there shouldnt be any problems. You may also want to go weekly with the one bedrooms as the going rate is 100-150 (IE 400-600 monthly), and the eviction process is faster. Dont forget that you can also charge for water if it isnt already set up that way.
Good Luck,
Kyle[ Edited by KyleGatton on Date 04/07/2004 ]
Mark and Kyle pretty much told you everything you need to know. The only thing I would add, would be a suggestion to deal with the 3bdrm unit first. The 1 bdrm units are occupied, and as Kyle mentioned they're more difficult to fill. So this being the case, get the 3 bdrm unit to the appropriate rent level and only then start working on the 1 bdrm units. this way if one of them is vacant for a while, it won't feel as painful in your pocket.
Good luck.
remember a good tenant could be worth a little less rent.
