Lose Good Tenant or Money due to Rehab?

[Mitch Price]

Hello, BP family!

In a little bit of a dilemma. Do I lose a good tenant or lose money due to rehab? 

Here is my issue:

I have a duplex I purchased earlier this year, that I am house hacking. When I purchased the property, I inherited a great tenant (quiet, pays on time like clockwork!) that signed a new lease with the sellers right before they sold the property. The current lease is up January 31st 2019. They are currently paying $550 for a 2bed/ 2bath, which is WEEELLL BELOW market rent for the area (average is around $780). I am currently making improvements to the side I am living on (nothing major, just giving the unit a facelift). I informed them that I would be going up on the rent (to $700) back in July. I do plan on making improvements to the side they live on after I am finished with the unit I am living in (with my job, which is 90% travel, I am not inconvenienced by having toilets, shower, cabinets, floors, etc ripped out and taking a little while to get replaced) They recently reached out saying they would like the rent to stay at $550 if no improvements are being made to their side, currently. My improvements look to be finished before the end of the year.

Questions:

1. Do I move them into the improved side and charge them the $700?

a. With this option, what all do I need to do to make the transition as smooth as possible (utilities?, move out inspection?, deposit?, etc? that sort of stuff)   

2. Do I keep improving my unit and get to their unit when Im done with mine? And have the tenant try their luck at finding a 2bed/ 2 bath for $550 (Ive done the research they aren't going to find that for that)?

b. With this option I don't want them living in a warzone while improvements are being made. Id have to be very particular on how I go about improving things

3. Or do I have them sign another year lease at the their current rent rate ($550)?  

c. leave things as is and just save up for when it is time to make the improvements to their unit it will be somewhat easy. (I say somewhat because dealing with contractors is never EASY!!!)