Everyone has different philosophies, but me personally, I prefer having total control over the tenants that get placed in my property. If my local landlord/tenant laws allowed it, I would not plan to renew her lease and put in the legwork to find the right person. Tough to speculate or know exactly what's going on with her situation. But general rule of thumb: I would never inherit a tenant unless I could be provided adequate evidence that the individual would pass all of my specific screening criteria.
Perform your own comprehensive screening and see what the results are. I'd suggest running a full background and credit check as well as an eviction report. Normally, it's free to you as the landlord and the applicant will pay. It's better to charge the tenant so you can test her seriousness about renewing. In addition, you could request pay stubs, previous landlord references, and an employment verification. If she seems like she fits your rental criteria, I would say renew her lease with a thorough contract that outlines rent payments, pet policies, maintenance, etc.
If you need a tenant screening service recommendation, please feel free to reach out directly through personal message!
I would have her fill out an application just like as if she was a new tenant. I'd then run her criminal & credit history and get info on where she works and how much she makes. If she qualifies in accordance with my new tenant qualification standards, then I'd sign a new lease. I have a $100 late fee + $10 day for each day it's late so late paying tenants don't bother me as much... as long as they pay. So I wouldn't be so concerned that she's paid late because she'll probably straighten right up when she gets hit with that fee and realizes that you're not going to EVER waive it. (NEVER WAIVE LATE FEES) jus sayn.
The possibility of signing a month-to-month lease (not just letting her live there month-to-month without a contract) might not be such a bad idea, but if she becomes consistent with making on-time payments and she's generally not a hassle to manage, I'd sign a sign a 6 month lease with her around October or so. You just don't want her to move out on you during the winter months. That 6 month lease will get you to the spring of next year.
@Koob Moua Seems like they were already a problem without paying her payments. I would switch directions and seek a more promising tenant with good background check to ensure not having problems in the future. This is not to say you won't have problems with other tenants, but instead not to start off with one.
Thanks guys for all the helpful advice. I still have some time to think since I have till July to close on the property. Appreciate all the help.
Never renew a term lease with a tenant that you have not screened, and are inheriting. In your due diligence, if any leases are coming for renewal you should ask for them to be delivered vacant or transferred to month to month. There is no good reason to renew a term lease with an inherited tenant.
The tenant will be paying you late too.
I think that I would want her vacated before closing if possible.