This is my first investment property.  A couple moved in a year ago and signed a yearlong lease.  The first 2 months' rent was paid on time.  By the 3rd month late payments started happening. The couple broke up and the BF left the house and decided he was not going to help his GF with the rent anymore, although they are both on the lease.  He was the only reason they were really able to rent in the first place because of his job and good credit.  She would not have been able to qualify alone.  He has intentionally been making it hard for her financially, and she has 3 children.  They were prior homeowners and sold their house before moving into my rental.

So, throughout the course of the year lease, she was struggling to pay.  She always paid, but she was late by over a month and a week one time.  Sometimes we had to break the payments up in half throughout the months.  We set payment schedules in writing twice, and she had to break our written agreement and ask for another extension.  For the last two months remaining on the lease, I gave her a non-renewal lease termination letter and waived the daily late fees.  I did not want to make it any harder for her.  (For the prior months, I charged daily late fees) I just wanted her to pay the rent price these last two months and be out so I could start looking for a new tenant.

I have been screening tenants for about a month now, and I'm increasing the rent by $75. I have found someone that has great income and can really afford to stay in the home.  He's coming for a second look this week with his daughters this time, on the same day my current tenant is supposed to move out.  I feel really good about him, but of course I need to verify everything first.

Now today, two days before she is supposed move, she sends me a message asking if she can stay and do a month-to-month lease and how things are better for her now with stability and her car situation.  She is very kind and respectful of my home, and to be honest she keeps the home immaculate. She has never tried to dodge me and has always been forthcoming. I have worked with her and compromised but like I said, I get paid, but the rent is always late by weeks and at most, a month and a week.  If she was late by a few days, it would be different and maybe I would reconsider.  I don't know.

Experienced landlords, what would you do in this situation?