How to increase under-market rent

me again, with another noob question. In looking around at places for our first IP, I find quite a few that I believe to be rented at less than the market rate. If, for arguments sake, everything else stacks up and a person was to decide that that was the place for them, how do you go about increasing the rent? Is it as easy as just telling the tenant that from (settlement date) their rent will go up from $X to $XX?
This is one of the most extreme cases we've come across:

(hope the link works:cool:).
I know from the section 32 that the guy in there is paying $715 a month:eek:. The place is about to sell (if not now sold) for about $310,000. The tenant is on a month to month tenancy and, according to the agent, has been told that his rent is about to go up. By my estimation, the place - which is pretty rough - is worth at least $240 a week (I know, I know, the numbers are still pretty shoddy ...). Can the new owner simply stick up his rent by that much?

thanks in advance.
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As you said they were on a month to month lease just give notification of an increase as soon as you exchange. If they don't like it they can move out. Do a reno and up the rent. Yours is a massive increase. I don't know how that would hold up.

Maybe buy it with vacant possession. Reno or not) and get a new tenant.

My new one settles the week before Christmas. I could reno but don't want to kick someone out the week before Christmas so am putting in a rent increase. If they want to move I don't care. I'll reno and rent it for more again. If they want to stay I'm happy with the new rent for a while. I'll reno a bit later.
In Victoria, for a month to month, you need to give a 60 day notice to the tenant on a "Notice of Rent Increase" form.


The Y-man
Not that we're buying this one, but the information is still interesting, so thanks for the replies. The agent said the tenant would need 90 days plus postage as notice to vacate - is that right?
So, for argument's sake, if you were to buy this on a 60-day settlement, could you give him notice from the day the contract was signed - 60 days and then the rent goes up - or do you have to wait until settlement? That seems most likely I suppose - you'd have to wait until you actually owned the place.
Also, isn't there some provision covering how much you are allowed to increase the rent by - in this case it's about a 50% jump.

cheers, folks.:)
Even if they are on a mth to mth lease, you are only allowed to increase your rent by a certain amount - check out what that amount is. I know this, we had a LL try to pull this one on us (obviously didn't realise i used to be tenant advocate). Best bet would be to go vacant possession and get a new tenant in. Although you could always just try th major increase and see if you get away with it.
As part of the contract ask for vacant possession [no tenant] and after settlement put in new tenant on a higher rent.