Your option there would be to increase the duration of the payments or pay him more down if you have the cash. 

It sounds like a single family house where you will be living in the house(personal use).Therefore, you may not be getting the tax benefits you think you are.Consult an accountant.I am not sure why your sister would agree to this as well, she is losing $170,000 in this transaction and she faces the possibility of you increasing her rent.You also have to charge market rent or close to market rent or it is all deemed personal use.

The difference would be $6,800/year with a 3% increase over 5 years. 

Converted an empty room to a standard room to make it a 6-bedroom instead of the original bedrooms which increased the rent from $2,200 to $2,800 for Section 8 voucher holders for this zipcode.

When it seems like they have a final bid and no one is willing to increase it, they will often times go talk to the owner for a few minutes.

I think we are competitively priced, so most of out tenants have been renewing, but we plan to test higher rents in 2025  for our larger apartment buildings to account for the steep increase in insurance prices.There have been A LOT of new apartment buildings put up recently in the Cedar Rapids metro area, so depending on the class of tenant you have, maybe that could account for some of softening you are seeing? 

Increasing it to at least $500K to $1M ensures better protection.

May have to increase your budget to 550k range tho. 

My thinking is increased value and cashflow on a long term hold.

Low vacancy, tax increase, interest rate increases and insurance increases.