Rent Increase Etiquette?

[Brian Jasinski]

Hope I am posting this in the right forum.....

I purchased a house with an existing tenant.  They had no lease in place, but have been paying on time.  It has been 6 months or so, and I want to get them on a lease, and adjust the rent for market conditions.

They currently pay $1,500/month, market for this small house is $2,200 or more.  $2,500 for an updated place / fresh paint & finishes.

The house is not updated, and could use paint, etc. so I am reluctant to adjust too high too quickly.  I cannot really get in there to freshen up the place while it is occupied. 

Is there an acceptable max percentage to increase rent?  I feel like telling them we are going to $1,800, and note in the lease that the rent it will increase $100 each year after that?

How much notice do you provide when increasing the rent?  Is two months notice enough?

Any feedback will be appreciated - Thank you