Landlords go month to month because it offers flexibility and allows them to adjust rental rates frequently. Going month to month also makes it easier for landlords to terminate a lease agreement if necessary.
This kind of lease agreement also makes it easier for landlords to evict tenants without cause or provide a notice to vacate.
In this article, we’ll delve deeper into the reasons why landlords go month to month and explore the pros and cons of this type of lease agreement.
Understanding The Basics Of Month To Month Leases
A month-to-month lease is a type of rental agreement where the tenant and landlord can renew or terminate the lease every month without any commitment to a fixed lease term.
It’s also referred to as a “tenancy at will” since either party can walk away at any time if they provide sufficient notice.
How Does It Differ From A Fixed-Term Lease?
In contrast to a fixed-term lease, a month-to-month lease doesn’t have a predetermined end date, and it continues until either the tenant or landlord chooses to end it.
Fixed-term leases expire after a specific period, typically a year and both parties must renegotiate if they want to continue the lease.
Additionally, month-to-month leases offer renters more flexibility and often don’t require a long-term commitment.
What Are The Pros And Cons Of This Type Of Lease For Landlords?
Pros
- Flexibility: The landlord can easily adapt to a changing rental market and adjust the rent price as necessary.
- Easier to evict: If a tenant violates a rental agreement, it’s easier to terminate the lease contract than a fixed-term lease which might require legal action.
- High occupancy: Month-to-month leases are convenient for some tenants who prefer short-term rentals, so landlords can benefit from higher occupancy rates.
Cons
- Financial risk: With no guarantee of long-term rent revenue, landlords who rely on month-to-month rent income can face financial uncertainty.
- Constant tenant turnover: Since tenants can terminate the lease at any time, there’s always the possibility of having to find new tenants regularly.
- Difficult to sell: Potential buyers may see properties leased month to month as a less attractive investment, as they don’t come with a guaranteed long-term income stream.
Reasons Why Landlords Choose Month To Month Leases
Landlords who decide to rent their properties on a month-to-month basis often have specific reasons for doing so.
Despite the lack of long-term security, landlords find it beneficial to have more flexibility, more frequent rent increases, and the ability to screen tenants who might be potentially long-term renters.
Here are some reasons why landlords choose month-to-month leases:
Flexibility For Unpredictable Circumstances
By offering a month-to-month lease, landlords can have the flexibility to make adjustments that are necessary and in response to changing circumstances.
For instance, landlords can evict tenants who pose issues to the property, such as causing damage to the property, unpaid rent, or breaking the lease agreement, without violating the lease agreement.
Overall, month-to-month leases give landlords more control and can be useful for tenants who need to move quickly.
- Allows landlords to make necessary adjustments when situations arise.
- Provides landlords with more control over the property.
- Offers tenants who need to move out quickly some flexibility.
Option To Increase Rent More Frequently
Month-to-month leases provide a landlord with the option to increase rent more often than an annual lease agreement.
With an annual lease agreement, landlords need to wait until the end of the lease term, which is usually 12 months, before they can raise the rent.
However, with a month-to-month lease agreement, landlords can adjust the rent every month or quarter, depending on the lease’s terms, giving them more financial flexibility.
- Offers landlords the freedom to adjust rent prices as needed.
- Provides landlords with more financial flexibility.
- Gives landlords the ability to control the income they make from tenants.
Screening For Long-Term Renters
Some landlords prefer month-to-month leases, giving them the ability to screen potential long-term renters.
By offering a month-to-month lease, landlords can determine if a tenant is compatible with their property, and if any issues arise, they can terminate the lease agreement at any time without breaking a long-term lease.
In this way, landlords can find the tenants who are the best fit for their properties.
- Provides landlords with the flexibility to screen tenants for long-term leases.
- Allows landlords to determine compatibility with their property.
- Offers landlords the flexibility to terminate lease agreements quickly.
Understanding The Local Laws And Regulations
Landlords who rent properties on a month-to-month basis must be familiar with local laws and regulations.
For instance, some areas have laws that prohibit rental increases over a certain percentage, unjust termination of a month-to-month lease, or tenant’s protection against the frequent rent increase.
In general, a month-to-month lease is better suited for landlords who understand local laws and regulations.
- Provides landlords with the opportunity to adhere to local laws and regulations.
- Protects tenants in situations where fair market rental rates become a concern.
- Offers landlords legal flexibility and security.
Frequently Asked Questions For Why Do Landlords Go Month To Month?
Why Do Landlords Prefer Month-To-Month Leases?
Landlords often opt for month-to-month leases to have more flexibility with their properties. It also allows them to adjust rental rates and end tenancies seamlessly.
Can I Negotiate Rent On A Month-To-Month Lease?
Yes, landlords are often open to negotiating rent on a month-to-month lease. It’s important to communicate effectively and be reasonable when making requests.
Is A Month-To-Month Lease More Expensive?
Month-to-month leases can be slightly more expensive compared to long-term leases. This is because landlords charge a premium for the flexibility and convenience they offer.
Can A Landlord Evict Me On A Month-To-Month Lease?
Yes, landlords can evict tenants on month-to-month leases with proper notice. However, they still need a valid reason and must follow local eviction laws.
Conclusion
Navigating the property market isn’t always a cakewalk. Opting for a month-to-month lease, you, as a landlord, embrace flexibility and adaptability.
It lets you adjust rent prices, screen tenants more rigorously, and terminate leases when circumstances demand. So why confine yourself to yearly leases when month-to-month ones hold the keys to opportunity?
Reference
https://www.law.cornell.edu/wex/month-to-month_tenancy