large rent increase in non-rent controlled, hot market

[Kim T.]

My rental condo is located in a very competitive market just outside San Francisco. there is a great supply of quality tenants and I never have vacancy time of more than a few days when they need to move. The unit is 1200 sq feet, 3/3 in a four plex.

I have great tenants now for a year lease at $2950, but am concerned the fair market value is closer to 3500. I know they can afford the increase, and it is legal to raise it by this much at lease renewal, given 60 days notice.  My concern is that it feels unreasonable, almost like a "bait and switch", But I don't want to sustain a rental loss either.

Since I can easily find new tenants, and will have little vacant time, is raising it and letting them move if necessary a better tactic than doing a partial increase as consideration fir them as good tenants?

I am looking for feedback from those who have faced similar dilemmas