Raising Rent for Long Term Tenants After Purchasing Property

[Kyle Mullins]

Hello! My wife and I are in contract for our first rental property, a triplex! The current owner has had it for 21 years and is older so rents have not increased over time. The current tenants are being charged $425 while the fair rental value for the area is about $600. Two tenants have been there for 7 years and we would like to keep all three. We plan to make improvements to the property to make it more enjoyable for them to live there, but we will not completely renovate the units unless a tenant moves out. So I feel it is appropriate to raise the rent at least a little. To do this ethically, we were thinking we would tell them in January that we would be making improvements in the spring and raising the rent to $500. They are month to month currently so in the spring if they agreed, they would sign a one-year lease. Then the year after, raise it to $550 and repeat until at fair value. 

Is this a good way to do this or is there a better way? I am not sure if this way of doing it is a good idea and would love to hear the communities feedback. Thanks!