I’d stick with 1), for the following reasons (obviously this is highly personal, and not recommended best practice):
– You’ve said in the past that this flat is your pension. I’m in the same boat, and I don’t consider rent from my flat to be income to be used/spent for day to day living, although your view may differ- as long as I break even in the long term I’m happy. Obviously this won’t make me rich.
– You’ve revealed some sympathy for the couple’s situation- be nice, it’s a hard world, they’re working and saving hard, give them a break, but let them know what you’ve done- that if something breaks and needs replacing you might need to put the rent up to cover the cost.
Otherwise 2) would be the sensible option- you don’t want to spark a break in occupancy, however brief.
After they leave, do the work you want to, and move to market rent.