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Do you really want to put them offside?? Why play hardball with what seems to be a good tenant?? They may reluctantly stay on and then not care for the place as well as previously...

Is the place above/below market rent atm? Built-in increases sounds like the best approach - that way you are seen to be reasonable...and like others have pointed out, you don't want to risk them moving...though, them moving will likely cost both you and them more then $520!