It feels like the only reasonable option is to say yes, (because I'm not going to evict them). So, here are my issues and a response that I'm considering giving them.
They always pay the rent on time - early actually.
They seem like nice people.
I won't have to deal with a turnover & can postpone those expenses - finding a new tenant, vacancy, prepping the place for new tenants, etc..
Right not, I'm over flowing with inquiries to rent the place. Atlanta rental market seems on fire. Will the market dry up in a month or two or three when they decide to move out?
Rarely does a month go by that I don't get a call for maintenance & repairs. And even the most minor repairs can not be done by the tenant because he is in a wheelchair. They are a family of five with three kids under 8 years old and so there seems to be a lot of wear and tear going on.
Our property is currently below market by about $200 a month and I was planning to start collecting an additional $100-$200 per month.
I had a couple potential tenants walk through the place and it sounds as if it's in pretty bad shape inside. Not clean, and the walls are pretty banged up. It's going to need heavy duty cleaning, fresh paint and carpets when they move out.
I don't have a monopoly on smarts so I would love to hear what you would do.
Here is what I'm considering - please let me know if you think it's reasonable or unreasonable.
I would like to respond and let them know that I was planning to begin collecting $1,300 per month. However, if they want to stay that I need to raise the rent by $100 to $1,200 per month. Thoughts?
One complicating factor - I was planning to fire my PM. He scammed these poor people and me. He rented it to them sight unseen, didn't even perform a walk through with them, probably because he didn't even do the prep work that he charged me for to prepare the place. It was filthy when they moved in. I feel confident that he did not do a back ground check on my tenants. Because my tenant is disabled and in a protected class and I'm inexperience with the laws surrounding their rights I'm nervous to transition to PMing the place myself until they are out. If they are going to sue for any reason then I want the entire contract of their tenancy to be with him only. So, I'm going to ask them to continue paying their rent through my PM. Make sense or am I being paranoid?
"I was planning to begin collecting $1,300 per month. However, if they want to stay that I need to raise the rent by $100 to $1,200 per month."
Keep with your plan to fire the PM and then sign a new lease with your existing tenant. This will also give you a boost in cash flow. Check your contract with them to make sure what you need to do.
You can read up on tenant law.
You already know that you have a tenant that pays on time. That in itself is gold.
You are within your right to increase the rent. They must have looked at the market and realized what a steal they were getting.
I'm assuming they are now on a month to month lease? If so, maybe they're looking to move out soon again, and this is just a short delay in the inevitable vacancy and prep you'll have to do soon. So definitely increase the rent to offset your costs.
Don't put much stock in the large number of inquires. Most of them amount to nothing, tire kickers, unqualified people.
When I listed my $2500 rental recently, I got 63 inquires in a week, half the people who booked a showing were no-shows, and the rest of the inquiries were flakes who stopped responding. Out of 63, only one family was serious and put in an application.
Wow, @John Underwood and @Mike Franco thank you so much for reading my post and such great information and responses. My tenant wants to do another one year lease. And You're right - it's gold that they pay on time every month. I'm going to take the leap and send them a lease and start reaping some increased cash flow. That was a real eye opener about how many inquiries vaporize! Who knew?
I would contact them and tell them that you are willing to let them stay, with a new 1 year lease, and what the new rent amount will be. That way they still have time to follow through with moving out if they don't like the new terms. I think this would work well for you because it sounds like turn-around would cost you a lot in repairs, especially if you are paying someone else to do it. This way they can help pay for them themselves by paying more rent. Good luck!
My tenants agreed to a one year lease at $1,200. No negotiation. And they said they were happy to.(!) wow!