When you look for a renter, you look for the best renter. You cross your T’s, you dot your I’s, and you use the screening service that works for your unique wants and needs. This lands you the applicant that you think would be fantastic, and that means you want them to stick around! Now it’s time for the next bit: you want them to stick around, so does that mean you give them a yearly lease, or month to month and hope they stay? It’s your choice, so, what are the pros and cons of using a monthly lease?
Pros
When you look for a renter, you look for the best renter. You cross your T’s, you dot your I’s, and you use the screening service that works for your unique wants and needs. This lands you the applicant that you think would be fantastic, and that means you want them to stick around! Now it’s time for the next bit: you want them to stick around, so does that mean you give them a yearly lease, or month to month and hope they stay? It’s your choice, so, what are the pros and cons of using a monthly lease?
Flexibility and Control
The most obvious reason is what you say, goes. With a monthly lease, it’s much easier to change the contract a bit, switch it up, add or take away things from your contract. If this tenant doesn’t seem to be the one for you, you can choose to not renew the lease and later look for a new one. If you want to raise the rent (within your location’s possible rent control limits), you can do that with more ease than waiting a whole year.
Pros
Flexibility and Control
The most obvious reason is what you say, goes. With a monthly lease, it’s much easier to change the contract a bit, switch it up, add or take away things from your contract. If this tenant doesn’t seem to be the one for you, you can choose to not renew the lease and later look for a new one. If you want to raise the rent (within your location’s possible rent control limits), you can do that with more ease than waiting a whole year.
Monthly Premiums
Some landlords use an extra charge, or monthly premium, when renting for the short term. According to The Reluctant Landlord, the author charges a “$300 ‘clause’” when someone rents from her using such a lease, giving her “a major bonus.” Ask a lawyer in your area if this could work for you, depending on varied laws in states that favor tenants.
No Penalty
It is very hard to “break a lease” when in reality, the lease just sort of… ends. Let’s say your tenant did not pay their rent this month. You don’t have to break the contract, get an eviction lawyer, wait for a pay-or-quit, etc. Just give them the proper notice that their lease will not be renewed, and you can move on with your life.
Cons
Monthly Premiums
Some landlords use an extra charge, or monthly premium, when renting for the short term. According to The Reluctant Landlord, the author charges a “$300 ‘clause’” when someone rents from her using such a lease, giving her “a major bonus.” Ask a lawyer in your area if this could work for you, depending on varied laws in states that favor tenants.
No Penalty
It is very hard to “break a lease” when in reality, the lease just sort of… ends. Let’s say your tenant did not pay their rent this month. You don’t have to break the contract, get an eviction lawyer, wait for a pay-or-quit, etc. Just give them the proper notice that their lease will not be renewed, and you can move on with your life.
Turnover
With a yearly lease, the implication is that – theoretically – you won’t have a vacancy this year. No move in problems, no big trucks, et cetera. With a month – to – month renter, that implication is gone. Someone might be in for one month and then gone again. With the short, thirty-day notice, it will be very hard to find a tenant in time to cover the next month’s rent.
Cons
Turnover
With a yearly lease, the implication is that – theoretically – you won’t have a vacancy this year. No move in problems, no big trucks, et cetera. With a month – to – month renter, that implication is gone. Someone might be in for one month and then gone again. With the short, thirty-day notice, it will be very hard to find a tenant in time to cover the next month’s rent.
Foggy Future
That thirty-day notice can come back to bite you in more ways than one. If you’re prone to anxiety, with every new month you might start wondering if this is the last one. Even if a successful rent month goes by you might not lean to thinking, “oh good, they’ll stick around, but what if this is the month they start planning to leave?” There’s no real guarantee that they’ll stick around.
Stable Tenants Need Persuasion
Naturally, you want good tenants who stick around. Those people may not like the idea of a month to month lease. People who have their roots set, a long-term job, ten-year plans, and call your property, their home will want a lease that looks to the future in the same way they do. If you have a month-to-month contract to offer, they’ll need something extra to decide to rent with you.
What has your experience with monthly leases been? Let us know in the comments!
Foggy Future
That thirty-day notice can come back to bite you in more ways than one. If you’re prone to anxiety, with every new month you might start wondering if this is the last one. Even if a successful rent month goes by you might not lean to thinking, “oh good, they’ll stick around, but what if this is the month they start planning to leave?” There’s no real guarantee that they’ll stick around.
Stable Tenants Need Persuasion
Naturally, you want good tenants who stick around. Those people may not like the idea of a month to month lease. People who have their roots set, a long-term job, ten-year plans, and call your property, their home will want a lease that looks to the future in the same way they do. If you have a month-to-month contract to offer, they’ll need something extra to decide to rent with you.
