The rental increase is something you may need to discuss with the tenant even before you fill out the letter. If the tenant agrees to your conditions, you can write down the formal letter. Pick this universal template from PDFLiner and simply fill in the empty sections. Send it to the other party and ask them to sign it as a gesture of the agreement. If the tenant does not agree to your conditions, you may need to exchange thoughts, and you still need to notify this person in advance. The letter has to be sent one month before the increase of the payment so the tenant can find a new place to live and you can find a new tenant.