First year is up - how to raise rents, keep tenants and lease

[Michael Phillips]

Hello everyone, I am coming up on a year with the first tenants in my duplex rental property located in Echo Park in Los Angeles.  I have two renting the bottom floor that signed Oct 1 2018 and one in the top floor unit that signed feb 2019.  Given that the first unit is coming up on the end of the lease I want to make sure I handle the transition well.  The unit goes for $3,050 a month and the tenants seem to be pretty happy with things, we have a decent line of communication ( I am self managing the property) and I have been responsive to concerns and proactive on repairs.  

My main question is if I need to have/should ask them to sign another year long lease or let it lapse into month to month. I would like to bump the rents and given that the property is rent controlled with me paying one utility I can increase 4%.  Any tips on how to approach this with tenants?  My landlord (I rent in down town) only does month to month and I get a notice every year just slide under my door with the increase on it.  I have zero appreciation for my landlord however and would like to set a better precedent.

Any tips on how/when/what to communicate to these guys?

[John Underwood]

I agree with renewing the lease at 4% higher rate. Set the expectation that cost of living and rents go up each year.
Taxes certainly keep going up on property owners.