Raising below market rent on new property

[Erin Klein]

We are about to close on our first duplex! We will live in one side and rent out the other.  That side is currently occupied by what seem like great long term tenants. They are month to month, but are paying about half the market rate.

We would like to avoid the hassle of tennant turnaround if we can, and plan to offer that they can stay with monthly increases of $100 until the are at the low end of the range we found on comparable units.

Are we better off doing this on a month to month rental agreement, or building it into a lease somehow? If month to month, can we lay out the increases in a letter one time, or do we need to notify them each month?