First visit to my propery In 5 Years - got some questions.

[Nicholas S.]

Ok, I know, I'm absolutely remiss for waiting 5 years to physically check on my rental property. Problem is, I live ~1200 miles away.  Tenant took the house 8 months after it was built, so everything was brand-new.  Anyway last week I gave my tenant several days notice and jumped on an airplane and dropped in for an inspection.

•(1344 finished sq feet. 3 bed/2 ba unfinished basement, 2 car)

•He obviously cleaned the house fairly deeply for my arrival.

•He seemed nervous and asked me if my visit meant that he should start looking for a new place to live. I immediately calmed his fears.  "Of course not, I just wanted to check on the place."

•Before I started my inspection, he asked me to sit down and proceeded to make several confessions.

- His lease is for himself and his adult son (a police officer), but for the last several months his adult daughter and her 5 year old child have been living in the home, and will continue to indefinitely.  

- All three maple trees in the front yard (planted by the builder) had died in the last 2 years.  He had removed 2, the other remained in the ground.  This means to me they lived 3 years before they died.

-The giant dog, obnoxiously/frantically jumping up onto the sliding glass door scratching vigorously at the handle, the whole time I was there, was a recent addition.  They got him as a puppy and had grown just shy of a great dane size. He was an INSIDE dog, hence his behavior not liking being put out for my visit, but he assured me he has never has went potty in the house. Not only did this dog scratch nonstop on his hind legs at the sliding door, he would relocate to the house windows and jump up and scratch at them and the vinyl siding with powerful strokes.  Originally my tenant had been approved for 2 older basset hounds (outside only dogs) for which, upon move in, he paid to have my backyard fenced himself with a rather quality plank farm fencing.  The bassets had apparently passed with age.

-He acknowledged the carpet was worn quite substantially and stained substantially.  This was not builder grade carpet, I had paid for a medium-high grade carpet and pad upgrade. He confessed it had not been properly card for, but that he planned to live another 4 years in the house until his retirement, at which time he suggested I would need to replace it anyway.  (9 years total)

-Even though he promised he would never smoke in the house, he confessed he would sometimes smoke in the bathroom with the fan on when it was too cold to go outside.  I could detect the smell in the bathroom, but it was not overpowering, and I couldn't detect any cigarette smell in any other part of the house.

Confession time was over, I proceeded with inspection.  The house looked very worn, but nothing appeared to have been outrightly mistreated. Formica counters looked to have a medium degree of water damage here and there. Walls were fairly dingy, baseboards pretty ragged, etc.  But nothing a deep cleaning, fresh painting, new carpet, new vinyl flooring, and a bit of minor repair here and there wouldn't fix.  He did paint a couple rooms himself, which were done VERY nicely, in essence as good as a professional could do.  This tells me he cares at some level and has an eye for detail.  All the windows needed calked.  His garage door wouldn't open automatically because the dog had chewed the wires on the sensor (not my problem) he told me he would have it fixed.

Outside vinyl siding needs a power-washing, and there were a few cracks or breaks where he had hit the side of the house with his ride-it mower.  Grass looked healthy enough.

I've never raised or lowered his rent the entire time.  Doing a little research I feel like he's paying probably $100 under market right now.  But given the condition of the house, maybe not.  I'm calculating market if it was in great shape.

My question:  What would you experienced guys/gals do?  Any thoughts?

Should I raise the rent due to increased occupants?  Raise the rent because of dog?  Charge him for the dead trees? Require an increase in the secuirty deposit of some sort?  I hate to run him off because he has always paid on time, and despite the wear and tear, he's not harming the house per/say.  And I do believe him when he tells me he will stay another 4 years.

Ok guys let me have it, I'm ready to be taken to the woodshed :) LOL.