Lease renewal advice

[Jason Bach]

My wife and I currently own and live in a three unit building in Chicago. We have one studio occupied by a tenant who has been there for two years who pays $850 a month. The other unit is a two-bedroom one-bath and rents at 950 a month. The two bedroom one bath unit is not remodeled and if we were to remodel it we should easily be able to get $1,200 on the low end, judging by current rents in the neighborhood. I put an increase to 1,075 into the lease upon renewal. We like the tenant as well. Just wondering people's opinions on whether or not to just not renew, renew at 1075, or other ideas?