This might seem like a simple question but often times the amount of money to be gained by raising the rent isn't worth the actual costs in doing so. Let’s consider the following scenario.
The market rent for the property is $1200. The tenant is currently paying $1150. The tenant has a lease that will expire in 90 days. Raising the rent by $50 per month at this time will bring in $600 more per year for the owner. 45 days in advance of the lease term, you inform the tenant of the rent increase. They already think they are paying too much, and no improvements have been made to the property that warrants the increase. So the tenants look around and find another home in the same neighborhood that is $100 less than they are currently paying. 15 days later they give you a notice you that they will move at the end of the lease term. They will rent a truck for $29.95 and move. This will save the tenant $1200 a year in rent rather than paying $600 more to you.
Even under the best circumstances there will be "turn around" expenses that can not be charged to the departing tenant's security deposit. Utilities will need to be turned on, landscaping must be maintained, painting in the unit may be necessary because of normal wear. Carpets could need stretching etc.
Chances are that the home will be vacant for at least one month and the loss of rental income will be $1150. Here is a list of fees that must be also be considered.
$1200 to $1800 in refurbishing costs associated with getting home ready for next tenant.
That totals $3775 for just one month of vacancy. Each additional month the home is vacant will add $1150 to the cost of raising the rent.
So factoring all costs involved, the decision to increase the rent $50 per month, will take 6 years and 3 months to break even. This is determined by dividing the $50 increase into the $3775 loss $3775/$50 will equal 75.5 months. Which is 6 years and 3 months to break even and realize the $50 gain.
It is always your decision to make, but my advice is to keep the cash flowing into the property and not just raise the rents to raise the rent. The $50 increase may make a great tenant move into a less expensive property or it could trigger them into buying their own home.