Some questions as I approach my first lease ending/renewal

[Alex K.]

Hey everyone! Thanks in advance for any help with these questions. I currently live in Southern CA, I have my last residence as a rental (5 miles away). Last year was my first year as a landlord, and knock on wood its been super easy. Granted, when I lived there I did a lot of work so it’s definitely one of the nicer ones in the area. During the last 10 months, we just had 1 repair request for an appliance, for which I used my home warranty. I self manage this one and our primary means of communication is through text. These tenants pay a day early like clockwork. Rent is currently $2200, all my expenses said and done are $2061, leaving me $139 in the green. It is a 2bd/1ba, approx 950sq/ft, no garage but a carport with storage.

Questions I have as I approach a lease ending in Mid November, 2 months away…

• -How much notice do I need to give before I ask if they are staying or leaving?
• -Do I tell them rent will go up $50 before I ask if they stay or find out if they are staying first..
• -My rent is on the higher side of the comps, but the HOA keeps going up each year.. ($316 now) Last year it went up $36 and I just talked with them and they are proposing it will go up again, how much, I don't know. Is it reasonable for me to tell the tenants I am increasing rent to cover the costs? For some reason I feel if I give them the reason it's just to cover my increased costs, they'll be more likely to understand.
• -If they are leaving, can I start showing the place while they are living there?
• -If they are staying, can i just get a quick renewal lease that says “everything from previous lease agreement is extended to xx/xx/xxxx date.”?
• -If they go, how does a final walk through work? If they stay, should I do a walk through inspection before the lease is renewed? Do they have to be present for this?
• -Which deposits are returned and which do I keep? Security deposit, pet deposit, key deposit.

They are really good tenants, they pay on-time/early, no issues, easy to talk with. Do I even risk upping the rent? If they say they won’t stay for the $50 extra, can I go back to their current price and ask if they’ll stay again?

This is my first lease renewal so I know some of the questions are elementary.

Thank you!

[Colleen F.]

Notice: Check local law but I would say 60 days.  Does your lease automatically convert to Month 2 Month? Check the lease. 

I write a renewal notification and ask them to sign, it is multiple choice and says nicely thank you for being good tenants..expenses have gone up.  we would like to offer you renewal of 1 yr at x price. Check and sign below and return by  date.  The two choices are I  wish to renew at (insert new price) or   I will terminate my tenancy at the end of my lease on x date.  Signing this document confirms my choice.  It isn't exactly like that but that gives you the gist. 

Yes, it is reasonable to put a general note that says our expenses have gone up for xyz and thus we need to increase your rent but don't be specific. You don't have to apoligize for raising rent, things go up, the tax office and HOA don't apoligize to you on increases.

If they are leaving, can I start showing the place while they are living there?   Yes, that should be specified in your lease. 

Final walkthrough- just check everything is functioning and charge for broken not wear and tear like painting. Point issues out but don't issue a check that day, follow local law. Deduct for broken and send letter per local law

If they stay no walk through.  As for what deposits to return, what does your lease say? If you have a security deposit and some other deposit or last months rent it should be in the lease what happens. Only do allowed deductions and send itemization by so many days. 

Sounds like your first task is read local law. The second would be to figure out if you are saving for your long term capital expenses with your current rent/cashflow. Sounds like you aren't.