First time Rent Increase after 2 yrs, $100 too much on $1100 rent

[Jay Mayer]

Hello everyone, 

I am a new landlord with little experience and wanted to get some insight on a rent increase I am planning on my rental home. 

It hast been 2 yrs since the tenant moved in and assuming they want to sing up for a 3rd yr, I would like to increase rent at least by $50 in order to cover a recent interest rate increase on my mortgage. 

I initially rented the home $150 less than similar homes at the time because the tenant was a "known" person and they could not pay more (at the time the tenant had a lower paying job than today), plus it was convenient for me to have someone mover right away. That was that, probably a mistake, but it worked out so far in the sense of having the home rented and a good paying tenant. 

As for the numbers, from what I have researched online rents are up today by at least $200 more for similar homes. Rent is $1100 and a similar home would Rent for $1300 today. 

So I was thinking of a $100 increase to cover the $50 mtg rate increase plus $50 to get close to market price. At $1200 monthly rent after the increase, It would still be cheaper by $100 for them to stay versus finding a similar home, but they may not see it that way and I don't want to piss them off or make them leave because a $100 increase could be a shocker. 

So should I go for $50 or $75 or $100 or what number would you suggest?

Sorry for the long post, and thank you in advance for your insight you may have. 

Have a great day.