Recently purchased a 2-bed 1-bath house that also included a detached insulated shop/garage for $78k and appraised for $105K. I have a potential long-term tenant whom I very much prefer to avoid any vacancy on my first deal. Since they are looking to sign a multi-year deal, I wouldn't mind keeping a slightly below-market rate in this example, I would use $800/month 

My question is, does anyone do a low yearly rental increase on long-term tenants (2%) as to keep up with property taxes or potential repairs, or does this complicate things, and should I just charge a rate I know that I would be happy with for 2+ years? 

Also, I plan on subdividing the property and selling the furnished garage, and using this to purchase a second property. Open to any thoughts on that as well. 

Thanks, also, this is in a small rural Iowa town.