When to raise the rates?

I just took over some rental property from another landlord in the Charlotte, NC area. The previous owner sold me 4 duplexes (8 units) fully occupied. When I reviewed the rent rolls, I quickly discovered that, except for the lone S-8 tenant, the rent rates have remained constant. Some of the tenants have been there 3-4 years or more and never an increase in rent. Most of the tenants are now in month-to-month tenancy because the previous owner never asked the tenants to sign new leases once the term on the original lease expired.

I don’t want to be a bad landlord and run off the tenants with new rate increases or lease terms, but I have to figure at some point I should 1) get new longer term leases with the tenants and 2) raise the rents.

What strategies should I employ for balancing this tight-rope? Is there any good measure of what the market will bear?

The issue is how much under market rates are you. You do this by spending a lot of time looking at classified ads, etc to figure it out. Then consider to give a small boost in the rent to “close the gap”, but not be at market rates.

No one likes having the rent raised and some tenants will get angry with you. Point is are doing this as a business matter. Keep the increase small (less than 10% or $50/mn which ever is greater). Also you might consider to do some comestic improvements to “show” people what are they getting for their extra money.

I would not worry about mon-to-month vs. lon g term lease but rather are the terms of the lease still OK. Old lease can contain terms which are out of date, not compliant with current law or just weak. Consider to redo the lease if that a problem

You do not want long term leases. Renew them every year in May or June with small increase. Even if they are long term tenants you want a small increase. You do want them covered by a lease. It may say a month to month after the first year but you want their and your responsibilities covered in that lease.