Rent Increase & Security Deposit on Inherited Tenants

[Kelli Gaul]

Hi all! I wanted to get some opinions on our situation to see what others would do.

We acquired a duplex in Queens, NYC in the beginning of April with inherited tenants in one unit. The other unit is vacant and we'll be renovating before getting in new tenants.

The current tenants are paying $1,200/month and market rents in the area are around $2,000/month. There's no security deposit. We are keeping the tenants in place, but will increase the rent over time to get closer to market rent. They're currently on a verbal month-to-month lease and we'll be getting them on a 1-year written lease.

My general question is, how would you go about increasing the rent? Specifically:

How much would you increase the rent initially & per year after that? 

How much notice would you give before the rent increase? (I did not see a legally required time frame for a new lease or rent increase for unregulated apartments, please correct me if I'm wrong.)

Would you require a security deposit with the new lease?