not renewing long term tenant lease
Looking for a bit of advice on how to handle this situation. I just bought a duplex a 6 months ago and inherited the upstairs tenant. Downstairs was vacant, I cleaned up the apartment, screened and screened and got a great tenant.
The tenant I inherited has been living in this apartment for 8 years now. He pays his rent on time every month, which is almost 200$ below market. I have 2 months security ($1800) for them. He is on a 1 year lease and lives there with his illegal wife (she is from Honduras) and daughter. She does house cleaning jobs here and there and the husband works as a chef at Red Lobster. They make very little money. The husband also collects disability for whatever reason but can still work. I got this house for a great price but the apartment they live in needs a lot of work. New kitchen, floors and some updates in the bath as well. I'm thinking $5000ish because I'm able to do some of the work.
The PROBLEM. They make so little money that if anything ever happened, I doubt they would be able to pay rent. If I raise rent in June when his lease expires, I doubt they would be able to afford it. They have run out of oil 3 times this winter so far and it's only January. The rent they are paying is ok based on the current condition of the apartment but I need to renovate that apartment so my appraisal next year comes in at the right number so I can pull my cash out. If I renovate the apartment now, which I want to, then I'll have to raise rent which I know they cannot afford. I know that if I kick them out of my apartment, they are going to have a very hard time finding a new apartment with there income as well as the fact that his wife is not a citizen of US.
Just curious how you would handle this? I'm pretty sure I just need to not renew the lease but it's hard to kick a family out onto the street that has been living in this house for the past 8 years. They are really nice people and rent is definitely their priority. The previous owner said they never missed a month in 8 years.....