Lease renew and increase of rent

[Sarah Byun]

We just purchased our first multi-family property and couple of the tenants have been there for more than 10 years without a rent increase.  The rents near the area are about $75 to $125 more than what the tenants are paying (They've been paying the same since they moved in).  Top of that, the previous owner covered all the oil heating and the water bill expenses. There's just no way to cover all the expenses (especially with oil price during the winter).  We need to raise the rent. how much is a good amount?  The renters are in month to month.  What will be the best way  Send a letter for lease renew or vacate along with new lease agreement with increase of rent letter?  Where can we find the already made form for this situation?

It is June now, so if we send a agreement letter this week, when should we ask the form to be sent back by and if the tenant renews (starting August rent increase) and if the tenant vacate (by Sept. 1st) will be good?