Can I raise the rent after buying a rental in Washington?

When you buy a rental with tenants in it, you step into the seller’s shoes. The leases continue, the deposits come with the building, and the rent stays where it is until the law and the lease let it change. Four things decide when that is:

1. Washington’s annual cap on rent increases, which applies to most rentals in the state.
2. The rule that rent cannot go up during the first 12 months of a tenancy.
3. The notice you have to give: 90 days statewide, longer in some cities.
4. The lease itself, if it runs for a fixed term.

In 2025 the legislature passed HB 1217, which added a statewide limit on rent increases to the Residential Landlord-Tenant Act, chapter 59.18 of the RCW. The limit is 7 percent plus inflation or 10 percent, whichever is lower, over a 12-month period. The Department of Commerce calculates the figure every year and publishes it; for 2026, Commerce published 9.683 percent.

Because the number moves, look it up each time you run an analysis and again before you send a notice. The cap is only a ceiling. Where a tenant already pays close to market, an increase anywhere near it would likely empty the unit.

A renovation does not, as a general rule, give you a way around the cap. If a seller or a contractor tells you otherwise, ask a landlord-tenant attorney before you pay a price that depends on it.

An occupied rental comes with its tenancies on their existing terms, so three documents deserve as much attention as the inspection report:

• Every lease and every amendment, including month-to-month arrangements that were never written down.
• The rent ledger, showing what was actually paid and when, which can differ from what the lease says.
• The deposit accounting: how much each tenant paid, for what, and where it is held.

Deposits are typically credited or transferred at closing, and tenants are told in writing who holds them now. Your closing agent handles the mechanics, but you should know the figures before you are committed, because the deposit liability becomes yours.

Statewide, a rent increase requires 90 days’ written notice. Some cities require more. Tacoma, for example, requires 180 days’ notice on the city’s own form as of January 1, 2026, and it also requires a current business license in the owner’s name before any increase. If the property is in Tacoma, read Tacoma’s 2026 landlord rules from a buyer’s seat before you set a rent plan.

A realistic sequence for a newly purchased rental:

1. Closing day. You now own the building and its existing tenancies. Rent stays as it is.
2. The first weeks. Introduce yourself to the tenants in writing, with where to pay and how to reach you or your manager. Get any required city license in place.
3. When the 12-month rule and the lease allow it, count back 90 days, or your city’s longer period, and send a written notice that complies with the cap.
4. The new rent takes effect on the date in the notice, and not a day sooner.

Depending on when the tenant moved in and when the seller last raised the rent, the first step up can be close to a year after you close. Sometimes it is sooner. It is rarely immediate.

The cap has exemptions, listed in RCW 59.18.710. The ones that come up most for small investors are these:

• An owner-occupied single-family house where the owner rents out up to two units or bedrooms, including an ADU.
• A duplex, triplex or fourplex where the owner lived in one of the units when the tenancy began, and still does.
• Newer buildings, where the first certificate of occupancy was issued 12 or fewer years before the notice.

The owner-occupied exemptions do not apply when the owner is a corporation, a real estate investment trust, or an LLC with a corporate member. And because the duplex exemption looks at who lived there when the tenancy began, tenants you inherit in a building the seller did not live in are likely still covered after you move in.

Notice what is missing. A single-family house that you rent out and do not live in is covered by the cap. The Senate’s version of the bill exempted many single-family rentals, and that exemption was dropped before final passage.

The owner-occupied exemptions are one reason house hacking still makes sense for some buyers: live in one side of a duplex, rent the other, and the analysis changes in several ways at once. Whether a particular property and your particular plan qualify is a question for a landlord-tenant attorney, and the answer is worth having in writing before you rely on it. The guide to buying rentals in Washington covers building types and owner-occupied financing in more detail.

Listings for occupied rentals often lean on the phrase “rents are below market.” That may be true. It is also a description of income you do not have and may not be able to collect for a long time.

When I analyze an occupied rental, the base case uses current rent for the first year, then allows increases no faster than the cap and the notice periods permit, at levels the local comparables support. Then I run the version where the tenant stays and the rent barely moves, because that is a real outcome. If the property only works once rents reach market, the price should reflect the wait. No rule of thumb captures that, which is the core problem with the 1% rule on Washington rentals.

• When did each tenant move in, and when was the rent last raised? Please send copies of the notices.
• Are there any rent concessions, side agreements, or promises about future rent that are not in the lease?
• Has any notice been given or received, by either side, that is still running?
• Which utilities does the owner pay, and do any tenants reimburse them?
• Will each tenant sign an estoppel or rent certificate confirming the terms of their tenancy?

Your agent can build these requests into the purchase agreement so the answers arrive while you can still act on them.