rent increase (by Josie [OH]) Apr 8, 2011 4:31 AM
rent increase (by Kathy [OH]) Apr 8, 2011 5:46 AM
rent increase (by billy [MA]) Apr 8, 2011 6:05 AM
rent increase (by Chris [CA]) Apr 8, 2011 6:13 AM
rent increase (by Josie [OH]) Apr 8, 2011 6:41 AM
rent increase (by kkezir [KS]) Apr 8, 2011 7:28 AM
rent increase (by LL [AZ]) Apr 8, 2011 2:27 PM
rent increase (by Gwen [OH]) Apr 8, 2011 3:05 PM
rent increase (by Josie [OH]) Apr 8, 2011 6:29 PM
rent increase (by Josie [OH]) Posted on: Apr 8, 2011 4:31 AM Message:
State Specific Question About: OHIO (OH)
We have 24 rentals but in August we bought our first rental that we intend to flip. The elderly gentleman we bought it from was renting it for half of the market average. One tenant has been there 11 years and could afford to pay twice as much(month to month lease). He rented the other side a week before we bought the house & gave them a one year lease, also @ 50% below value. We have been unable to flip the house because the rents are too low.
All that said, Is there a ceiling on a rent increase per year ? I was thinking of giving them 60 days notice, because it will be such a large increase. I didn't intend to double their rent, but it would be significant...They are each paying $350. for a 3 BR, market rents $650-850.
Any suggestions would be appreciated. Thanks ! --12.235.xx.xxx |
rent increase (by Kathy [OH]) Posted on: Apr 8, 2011 5:46 AM Message:
You cannot increase the rent on the unit that has a one year lease until the lease is up. It is very difficult for a buyer to obtain a loan on investment property these days. That is part of the issue, and not just the fact that the rents are low. You didn't mention anything about doing upgrades to the building, and if there have been no improvements in several years, that could be another factor in not being able to sell. --75.187.xxx.xxx |
rent increase (by billy [MA]) Posted on: Apr 8, 2011 6:05 AM Message:
i would wait until the lease is up to stay legal.then i would adjust rents.i would try to stay a bit under market. --173.14.xxx.xxx |
rent increase (by Chris [CA]) Posted on: Apr 8, 2011 6:13 AM Message:
Got estoppel forms? got the SD transferred? Was the new lease part of the info you had for escrow? I would take a long look at this, it stinks!
I would end the tenancy and start with a vacant unit or re-rent at market rent. Get a clean break... --125.25.xx.xxx |
rent increase (by Josie [OH]) Posted on: Apr 8, 2011 6:41 AM Message:
The lease on one side ends July 14,2012 the other tenant of 11 years is on a month to month. And yes we did quite a bit of curb appeal, including paiting entire house, porches and railings and garage. Plus new landscaping ,repairing & cleaning up walkways to reveal hidden brick sidewalk.
Yes security deposit was transferred, but only $200.for each tenant.
I don't know what estoppel forms are ??? --12.235.xx.xxx |
rent increase (by kkezir [KS]) Posted on: Apr 8, 2011 7:28 AM Message:
I would increase the MTM tenant to at least 500-550 and give a 60 day notice like you said. And you are just stuck with the other one. But I would have the letter ready to go out on the year lease so that when his 1yr lease is ending that the rent would be going up immediately. Then I would do yearly increase of $25 to bring up to market. Just my thoughts. --165.201.xxx.xxx |
rent increase (by LL [AZ]) Posted on: Apr 8, 2011 2:27 PM Message:
Oh boy - and this is why so many people lose money on income property. It is best to learn these things before they cost you money. :) (Not meaning to bash the OP, sorry.)
An estoppel letter (in this context) is a legal document tenants sign or that may be prepared by a seller disclosing the terms of leases and compliance issues. It states who is on the lease, how much, terms, etc. A lawyer could give you a better description.
This is how you flip a rental property. First you fix up the outside, then one by one you evict the tenants, renovate the units and bring in new tenants at a market rate. When you get all the rents up, you sell.
You have done step #1. Good!
Step #2 is to give the m2m tenant notice that his rent is going to market rate and that you need a one year lease at that rate. He can pay or move. If he moves you renovate and re-rent at market. You don't continue on m2m after the raise or he will move at his convenience not yours.
Then once the first guy is settled it will be pushing June. Then you give the lease hold tenant notice (per terms of your lease) that the lease will renew at market rate. They can sign a new 1 yr lease or move out. If they move repeat step #2.
Now you have a renovated property at market rate ready to sell for top dollar.
Now you have a new problem. Finding an investor who wants such an investment. This is what makes flipping small multi-fam rental properties difficult. Everyone wants a fixer upper that cash flows. --76.170.xxx.xxx |
rent increase (by Gwen [OH]) Posted on: Apr 8, 2011 3:05 PM Message:
You have also learned why it is a good idea to include in your purchase agreement that the seller may not rent any units while property is in process of being sold.
Unscrupulous LL's will fill up a builidng with any trashy tenant the can find if they want to sell a building and make it look like it is fully occupied with paying tenants. This is another reason to get the estoppel, rent rolls, etc.
July will be here before you know it. The best time to raise the rent on the old tenant would have been when you bought the place. They would have been expeting it. Another good time is when you do some major upgrade or maintenance so they can see where their money is going. --174.130.xx.xx |
rent increase (by Josie [OH]) Posted on: Apr 8, 2011 6:29 PM Message:
Thank-you all for taking time to respond. Your ideas are VERY helpful ! Love , Love,Love Mr.Landlord .com !
We have learned so much ! --12.235.xx.xxx |
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