Tenant wants to buy on a lease option/lease to own

[Dustin S.]

Hi all

I have a tenant who has been in one of my properties for 6 years now and has offered to buy the property in the past and has recently asked to purchase the property again in a lease option or lease to own. My plans for the property are a little bit different. but here is the situation. I purchase the property 6 years for $85k with 20% down refied a couple years ago and pulled out my initial investment. The property is now worth $150k and could be worth more like $170K with $8k-$10k in improvements. I was planning on starting these improvements this spring and summer. After completion I intended to raise rents closer to market. Current rent I am receiving is $1050/m and market is about $1250. Was planning on raising rents to $1150 after the improvements half in hopes the tenant would move out. I would then consider selling or refinancing to pull some of the equity and re-rent at market rents. How should I go about handling this situation and not become the jerk landlord. Also if I were to consider the lease to own or lease option how should I structure it?