Keep Tenant or Get Him Out

[Michele Velazquez]

I have a MFU in Austell, GA which is managed by a PM.  One tenant is paying $400 below market rent, he is often late for rent, and has returned checks. He is paying the least amount of all of the tenants.  His lease is up for renewal and I was thinking to raise it $400 to reflect market value and he will leave and I can get in a new tenant. However, the PM is saying that it is better to only raise his rent $250 (he still may leave) so we can keep him in there and not have to remodel and have a vacancy. This is all new to me so I'd love to hear your opinions as you all are much more experienced.  TIA

[Justin Hammerle]

My vote is to raise it to market by $400 if you think you can get it.  That's a lot of lost income, and for a tenant that has a bad record likely better to get a more qualified tenant in there anyway.  how much to remodel the unit?  Is the $400/mo increase contingent on the remodel?