OK, let me be sure I understand your advice. Offer tenant the 2 options.
Under the first option, where tenant vacates by end of September, tenant would pay the old rent amount under a 2 month renewal. Does it make a difference if we simply go month to month for August/September, or is there an advantage to putting the 2 month renewal in writing?
OR Under the second option, we do a 6 month written renewal through January 2013 for the raised rent. Can the raised rent take effect immediately for August given the late date of notice? After all, I'm not forcing the rent increase on them as they have option to pay old rent and vacate in 60 days.