Should I keep tenants or find my own?

[Niko Crowley]

Hi All,

Long time follower, first time poster.  I close on my second multi-family home at the end of December.  One unit is vacant and the other is rented at $1250 a month, which is well below market value for a 3-bedroom apartment in Massachusetts.  The seller has told me that they have been there 3 years, are excellent tenants, and they pay in cash so I would like to keep them.  He has also been kind enough to provide me with contact information for a potential renter for the vacant unit at $1400 a month.  

Is $100 increase fair or can I go up more? I should be able to get $1500 for the units all day, it is located right near the highway so it is a great commuter location.  

Should I use the potential renter he provided me or should I advertise myself and try to get market value? 

This is my first absentee owner rental property so I would like to be able to maximize my cash flow as I am still owner occupied at my first two-family which my mortgage is paid for by my tenants.

Best,

Niko