Acquiring Tenants and Need Guidance on How to Best Handle

 There cannot be a substantial change of the lease terms.   I do not consider increasing the security deposit in line with deposit rules (deposit same as rent) to be a change of lease terms.  So it is my view that the deposit can be raised to equal the rent at each rent increase.

@Daniela Damjanoski are you familiar with the deposit rules?  Going forward you need pictures both before and after to charge from the deposit.   I do not believe the before pictures applies in your case because your tenant occupancy precedes the law (who would have pictures of everything before a law dictated you must have pictures?).  However, how do you know the damage was not present at tenant move-in?   Unless the current landlord has pictures that they provide to you, you likely will not be able to collect for any damage that precedes your acquisition.  You have 17 days to provide the tenant the accounting, photos, and their remaining deposit.

Make sure you know the landlord/tenant rules or hire a pm that knows the rules.

Good luck