Going month to month at end of 1 year lease

[Bienes Raices]

My lease states that it goes month to month at end of the one year term.

My experience so far has been that tenants want a new one year lease, rather than month to month, because they're afraid of being told to leave or having the rent increased.

Normally I would offer the option of a new lease, but these particular tenants have been late (beyond the grace period) with the rent a couple of times now, and there have been a couple of other minor issues.

Would you take a chance on them moving out because of the lack of a long term lease, or take a chance of a future eviction/unpleasantness on a new one year lease, if things continue to go south in terms of on-time payments?

Thanks.

[Joel Owens]

You shouldn't be relying on the tenant to pay the rent on time to pay your mortgage.

If you are doing that you are making a mistake.How much of a late fee do they pay now??

You could increase the late fee slightly.If they pay 100 a month late that is 1,200 a year to your bottom line !

What you want from the tenants is a PATTERN.A PATTERN shows stability even if paying late.What you don't want is the tenant being unstable and trying to run your business not knowing what they will do month to month.

I would just increase the late fee and shorten up the grace period and eviction time line.This will force the tenant even though paying late to pay earlier than before.

You could also up the rent on the new lease but offer a rent credit if they pay early every month.

Say rent is 800 now with a 100 late payment.Up rent on new lease to 850 a month but 50 dollar rent credit if they pay on time but still keep 100 late payment.

You are just trying to condition them in a nice way to pay you first and not after utilities,car etc.