Should I renew the lease when tenant always pays late?
Hello BP Community,
I am new to real estate and this forum. I converted my primary residence to a rental property in October 2017. The house is in Los Angeles and the lease will be due in October 2018. From November 2017 to May 2018, the tenant had been paying rent late every month. June was the first month she paid on time. The rent is due on the first of every month. However, she always made the payment on the 5th, and there were at least three months she paid the rent after the 10th. I have been sending her e-mails to remind her the due date of the rent is the 1st, but I guess she has some cash flow issues that she usually cannot pay the rent on time. Overall, she paid all of her rent and 5 % penalty if it was kicked in. The timing of collecting rent has been a challenge to me.
There are four questions I would like to ask:
1) Do you think I should raise the rent on the upcoming lease? I think she is a good tenant, except for the fact that she made the payment late all the times. She stays on top of the house maintenance issues. She would contact me immediately if she notices anything that needs maintenance. She keeps my front and back yard very nice and I like her to be my tenant, except late payment.
2) If the answer of question 1 is yes, do you think raising the rent by $100 is appropriate? That means the rent would come from $3,100 to $3,200 for a one year lease, which is a 3.2% increase. My property tax increased 2.4 % last year.
3) Would it be unusual if I want to renew the lease as a 20 months lease instead of the typical one year lease? I heard there is a belief that doesn’t let your lease end in late autumn and winter. Since the renewal due date is October, I am afraid it may be hard to get new tenant during winter. In related to a 20 months lease, the new lease term will end at the end of May 2020. Do you think it would be a little too long for the tenant?
4) I am trying to renew the lease myself instead of having a real estate agent doing it. What should I pay attention to? I don’t think rent control kicks in since the property is a single family house.
Thank you all for the valuable inputs! I am glad to find this forum and meet all professionals here.