Jerrylyn,

Great question.  You are justified in raising rent $100 per month.  Here are few other issues to consider.

Who is paying for utilities? If you are, adjust rent according to increased utilities. 

Run background and credit reports on the inlaws.  Make sure you know who you are renting to.

You are changing the terms of the lease.  Have tenants sign a new lease agreement reflecting new occupants and increased rent.

Thanks,

Troy