How To Approach Tenant About Lease Renewal

[Konrad L.]

Hello everyone,

I have purchased my first 3-family investment just a little over a month ago and the current lease on my 4-bedroom unit will be ending on June 30, so the tenant has one more month of official occupancy.  

This being my first, I'm a little unsure on how to approach the tenant and ask whether they will be renewing, or if they will be moving out.  When I first talked to them, they said they would like to stay (they think).  I would like to address this, this weekend, as if they will be moving out, it would give me time to prepare for a new tenant.  

So my question is, should I just casually approach them and talk to them about whether they want to renew and stay, or is there an official form I should drop in their mailbox.  

If they do renew, should I seek 6 month, 12 month?  What is the standard?

As I said, it's a large 4 bedroom unit, with a family and two brothers living there.  They are nice people that actually help me around the yard, bring flowers for the front of the house etc.  I would like them to stay, but obviously I can't make them.

That leads to, if they do stay, should I risk raising their rent a few dollars, or just keeping it the same for the next contract?  Currently, they are paying $1,325 and I pay for water.  Should I be firm with a $20-40 increase, or let them slide, till I become more comfortable over the next year?

Thanks in advance!

Konrad