Rent increase, repairs needed, with in place tenants, complaints

[Larrian Davis]

Good morning, 

Background 

3 adults 2 children

pet is in the property

tenant wants kitchen remodel 

cosmetic work is needed on unit A which is the tenants

rent was $650  due to covid went up to $850 market rent

Unit B is fully remodeled and unit A needs work, Tenant is upset about rent increase and work needed on property. Her unit is livable and we want to work on the kitchen. I also want to lock in a lease with them and I was thinking $750 but my property management suggest I stay at my current rent due to water bill overage from high water bill - used at the property ( was a complaint I made a month ago)and since we made the change. Any suggestions on how I can fix this issue to work this out moving forward with them? They are good tenants just the hike in rent took a toll on them. I want to make this right without loosing too much money in the process. Water heater we did a full replacement and doors in the unit.as well. The tenants mention the carpet first being redone but now its the kitchen. I'm also thinking about lowering rent for a month while we have someone come in and redo the kitchen ( over one weekend) if they are able to be away for that amount of time. 

Any suggestions will be helpful to fix this? And insight having in place tenants?

Thank you