Would kicking out my tenant be unwarranted?

[Andrew Jones]

Good afternoon everybody!  I could use some advice on my Sacramento California duplex.  I am moving out to the next property and will be renting out my previous residence.  The property was originally three buildings (two duplexes and a 4 car garage) but has been subdivided.  I own one duplex and half of the 4 car garage.  We are one of a very few rentals in the area...it's in a desirable area with primarily owner occupied single family homes nearby.  

The tenant next door came with the property and has lived there for about 8 years (I bought in 2014).  He's not a bad guy, but I would not have rented to him if I screened him.  He's in his 60's and lives paycheck to paycheck.  He has 3 indoor cats (disclosed 2), 3 outdoor cats (ie feeding strays), the previous property manager did not ask for a security deposit, he works on his two junky cars and dirt bike in the driveway (huge oil stains in front of his garage) and he keeps equally mediocre company (not felons...just drinking, smoking...low class stuff).  The neighborhood has gotten a lot nicer in the last few years and I'm worried keeping this tenant will scare off better prospects.   I don't have significant problems with him as a tenant, but he's paying $1,150 after two rent increases where I'll be collecting $1,400 per month plus possible pet rent and deposit from a new tenant.  The agreement he signed up under was very informal too so I can't enforce better behavior to the best of my knowledge.  His unit is trashed (not vandalism, just him living in there with cats and being a slob) so if I did kick him out I'd need to shell out some cash to flip the unit.  Last thing to consider is the other duplex...the owner is a bit of an absentee landlord so it's run down and one of the tenants is worse than my current guy (and they're friends so they feed on each other's bad behavior).  I'm wondering if I should give him the required 60 day notice to vacate and start fresh or is this not worth the effort?

*Cliffsnotes version:

Possible pros to replacing my current tenant;

-Higher rent

-Better lease agreement to control tenant behavior

-Get a security deposit

-Start fresh

Cons to replacing current tenant;

-It may not go smoothly (ie they won't leave, eviction, etc)

-I'll need to replace all the flooring and update the 1960's kitchen at great cost

-I don't think I can do anything about the run down duplex/bad tenants next door