Raising rent on long term tenants in a newly purchased duplex

[Rachel Denz]

Hi all, thanks in advance for any help I can get!

I'm closing on a duplex that has tenants of 4 and 10 years paying $600 each on month-to-month leases.

Tenant 1 has been there 4 years and has taken really good care of the unit. This unit is a 1400sqft 2 bed 1 bath with an office space and playroom that would easily become additional bedrooms should the tenant move out and I get in to renovate.  Even as is, the apartment should be renting for at least $1000. With cosmetic updates and 1 more bedroom, comps are $1300-1400.

Tenant 2 has been there 10 years in the smaller unit (just under 800sqft I believe). 1 bed 1 bath with a 7x10 office. Comps look to be flying off the market at $800-850. This apartment is messy and worn. Nothing bad, but tenant clearly doesn't care for the place much.

So my question is how do I raise rent without getting 2 vacancies or tenants who hate the new guy right from day one? 

I'm not against renovating and getting new people in at higher rent, but I'd rather not risk both empty at once. Suggestions for this rookie are welcome, thank you!