When you look for a renter, you look extensively for the best fit resident; you do your due diligence and screen the applicants to find the best fit for your ideal tenant. Now, you want them to stick around, so does that mean you give them a yearly lease, or a month to month and hope they stay? We will give you the pros and cons of a month to month lease and explain why a month to month lease works best for you.
The advantages of a month to month lease are that it gives the landlord flexibility and control. The month to month lease makes it much easier to change up and add or remove things from your contract. Furthermore, if you feel that the resident doesn’t fit the qualities of a great renter, you can choose to not renew the lease and look for a new resident and not have to wait a whole year.
Second, many rental properties use an extra charge, or monthly premiums when renting for the short term. Depending on varied laws in states that favor renters, you may be able to charge an additional $300 for this type of lease, a major bonus for any landlord.
Finally, there is no penalty when you let go of a resident. It is very hard to break a lease because in reality, the lease just ends. In a month to month lease contract, you simply don't renew the lease, the resident must move out, and you’re able to make new choices.
With a yearly lease, the implication is that you won’t have a vacancy all year and therefore no turnovers. You won't have to worry about moving in problems or fixing up the unit. With a month to month resident, you don’t have that added security and you might have someone in for one month and gone again the next. With a very short 30-day notice, it will be difficult to find a renter in time to cover the next month’s rent.
Second, with a month to month lease, you don’t have a clear image of what lies ahead. If you are prone to stressing or anxiety, each month that goes by you will be wondering if this is the last for the resident. Even when a successful few months go by, you can’t rest assured that they aren't planning to move out the upcoming month.
Stable Renters Require Persuasion
Finally, a stable month to month resident requires persuasion. If you want residents who stick around, you must find residents who have a long-term job, ten-year plans, and they must call your property their home. If you have a month to month contract, the residents will need something extra to decide to rent with you.