New Landlord - How to Handle Rent Increases

[Sam Levine]

I am about to close on my first fourplex this Friday through an owner-occupied FHA loan. The property fits my investment requirements at market rental rates. Unfortunately, the previous owner has kept the rents for these units at $525 each when the market clearly allows for $700. All the leases expire in the Spring of 2018. At that time, I am planning on having them reapply for leases with the increased rent. From what I can tell on LinkedIn, all 3 tenants are white collared professionals, and during our limited interaction, have been fairly communicative. My question is two-fold:

1. While living there, what would you recommend saying if they ask about rent increases upon the lease renewal?

2. How should I approach the situation when telling them about the increased rent?

Any first hand experience is much appreciated.