Lease renewal / Rent increase question.
So I have a question on how to handle an upcoming lease renewal. I have a tenant, actually my best tenant, always pay on time, keep the place up, never really hear a peep from them. They are wanting to stay longer but want to also buy a house in the upcoming year. They are not certain of the timeline and want to know if I can work with them.
While I don't want to lose them as tenants, good for them for wanting to buy. Anyways when it comes to the situation of this lease renewal I was thinking of presenting three options.
Option 1 normal lease extension of 1 year and explain the lease break fee. Rent is at the market so not looking to increase for this term.
Option two 6 month lease with a $50 increase in monthly rent that switches to a month to month.
Option 3 to just do a month to month with a $75 to $100 increase.
This is my first time dealing with this situation so any input is appreciated. I want to hang onto this tenant as long as I can since they are literally the ideal tenant however given that they may want to utilize a smaller lease term I need to insulate for vacancy and turnover cost. I look forward to hearing the thoughts of the community.