These types of tenants often do this because they don't want to save in advance, so they take the rent owed to you and use it to put down on their next home.Recommend you do a better job of communicating to the tenants that you will pursue every legal collection option if they don't pay last month's rent.Also, why are tenants NOT staying with you?

The idea is that they might be upset about the increase but will realize they are still getting a good deal when they search around and find out similar units are renting for $50-100 more than their renewal rate. 

It's usually a good idea to look for rental properties that require little to no rehab because of the timeframe needed to get a property rent ready before marketing it to find suitable tenants.Hope this helps. 

Do you have an idea of where you'd like to invest?

Question one is, does this sound like an inherently bad idea to anyone?

Depending on your near term goals, one idea would be to hold the property and rent it out to let the property season for 12 months reducing your taxes as you will not be hit with short-term capital gains.

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I like the idea from @Clayton Silva - increase rent annually to get the amount up to market.If you have a paying tenant with a long, good history, consider the cost of her moving: You lose at least 1, maybe 2 months rent.

Tax preparers usually charge another $500 to prepare the 3115 calculation schedules per property so that saves you money.

Car mechanics, HVAC, you get the idea.