Rental Increase Dilemma

[Tracey Wittke]

I bought a property last October in a small town in Northern MI. The property itself has 3 units on it. The owner/landlord that I bought the property from was renting them out way below market value with no security  deposits or written contracts. I inherited two of the renters. One I had to double the rent and he also gives me so much monthly toward a security deposit , done deal. However my other tenant who is on "fixed income", I  initially raised the rent $50/month and she also had to cut all the grass all summer. I told her next year, now, I will be raising her unit to market value. She was paying $450 when I bought it, I raised it to $500. With some paint and new flooring I could easily get $750.00.

So here we are a year later. Her son moved in with her along with his dog. I sent her a letter stating that her rent will be going up (like I told her it would last year) to $625 month. She has always paid on time. 

She sent me a response letter stating that she cant afford the $625 living on SS and that her son has moved out and to please work with her while she tries to find a new place.

 I watch the market and know that she will never find another place to rent less the $625/month that allows animals in the area.

I am looking for thoughts/advice on what others would do in this situation.