Turn Over or Keep the tenant in new purchase

[Murali Jesudoss]

Hi BPers,

I am closing my 4th deal early next month in Kansas City, MO. This is tenant occupied property where the tenant pays $1150 a month for last 2 years with previous owner. Lease ends by June and I am in dilemma, if to turn over and do light rehab or just continue the tenant with $1250 or so rent(which is what she think she can pay to stay).  Market rent is around $1400+ and I was hoping to get at least $1300 or so.

But if we do the numbers with PM team taking the 50% of first month and easy carpet cleaning and other turn over costs even without light rehab(cabinet painting and fix any safety issues), the $1250 may still win. But I still wonder, should I just turn over and do the minimum possible rehab to bring market rent and plan for maintenance issues or should I continue the tenant for additional $100 but potential $100-$200 rental below. Tenant is motivated to stay. I normally prefer to take care of the tenant even if it is cosmetic issues, but would like fair market rent. Please share your thoughts based on your experience.