Tennant re negotiating rent at lease renewal

[William Peterson]

Background: Good tenant, pay on time. Property was in good shape when I inspected. Tenant asked for rate reduction. Area rent rates are flat to very slightly down from last year when they signed. Tenant is asking for around 45 (4%) dollars off per month(and signing a 18 month lease vs 12). Having them move out will cost me around 2,000, maybe slightly more. Out of principle I want to keep the rate the same or raise it however I know financially it makes sense to keep them in the place if they are not bluffing. Any advice? Thanks