?Renew for chronically late tenant?

[Stan F.]

I am trying to be objective. Long term inherited tenant who is about $150 below market. He is late 6-8 months out of 12 months. He pays with late fee. Yes my late fee is low $35; I plan to address it in the new lease but I ma trying to think if I should renew or not. I usually always increase rent 2-3 percent to not be too much below market but I am afraid that may be I hit max with this tenant and at this point either settle for what I got or I go fishing for new tenant. Place may need about $4-5k in remodel which I have in reserves ( new stair carpet, painting, some bathroom remodel). 

Thank you in advance for input. 

[Richard F.]

Aloha,

You probably just need to make it more painful for the tenant to be late. What is the max late fee your local law would allow? We are allowed only 8% of monthly rent. Also, how late are they, and why? If it is consistently one or two days, it's probably just laziness. If they always wait till their next payday, then you know they are struggling, and it will be better to "non-renew" and get them out sooner, rather than waiting until you get wrapped up in an eviction process, ending with multiple unpaid months. Cut your losses, update the unit to get top market rent, screen prospective tenants hard, move on.