Or, leave his starting stats as is, but boost might by 1 and increase the sanity check by 1 each time he is defeated and returns.
All his traits increase by 1, each time he is killed. That seems good enough for me as is. But sure, if you want to make him more nasty, let the sanity check increase as well.
With the random build of the house, you will sometimes find him easy to defeat, but at other times he'll easily rip through the party, before they figure out how to use the weapon. It is close to impossible to make the scenarios balanced, as there are so many variables.