Raising Rent - Good Tenant

[Clint Koehn]

I have a rental home in the OKC area and it's been rented by the same tenant for (3) years with no increase in rents.  It's a fairly nice 4/2/2 in a good neighborhood. It's currently month to month at $1,450 and comps in the area range from $1,700 - $1,850.

I'm taking over after relieving the terrible management company we had and trying to navigate this as delicately as possible.  They're good tenants, take care of the house, and want to stay where they are but they're likely to get spooked if I try to raise it too aggressively.  

I'd like to get them on a new (2) year lease.  Would it be abnormal to build small bumps into the lease to get it closer to market?  i.e. raise it to $1,550 then after year 1 it increases to $1,650?  If they do not sign a (2) year lease, I intend to raise it straight to $1,650.  If they leave, I could probably do a minimal refresh and get it up closer to $1,800, but I value keeping a good tenant above squeezing a few extra dollars out of the house.

Does anyone include escalation clauses like this into their agreements?

[Bjorn Ahlblad]

@Clint Koehn  I am not a fan of long leases; one year max and then MTM. I have not found the length of a lease to have any effect on how long a tenant stays. I pay attention to market rents, my tenants are great and they all get their rent raised 3- 5% per year. If you don't raise every year you fall behind and you then have to struggle-and your tenant does too.