Month to Month Lease – The Good and The Bad

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The typical lease term is one year to 3 years; however, there are times, for whatever reason, when a month to month lease is signed.  From the landlord’s perspective, the month to month lease has definite positives as well as negatives. The landlord’s circumstances can vary widely, which is why that there really is no definitive yes or no when it comes to whether or not the month to month lease is appropriate. Each situation must be looked at on a case by case basis to make the determination. Let’s look, from the landlord’s point of view, at the good and the bad, the pros and the cons to better equip the landlord to make a suitable decision.

Pros of a Month to Month Lease:

  • The landlord is not bound long term to a tenant: This is particularly beneficial for the landlord to free himself from a problematic tenant. If the payment is slow or sporadic then the landlord can just give notice and in 30 days the house is vacant.

  • The landlord is not bound long term to a property:  Landlords are made by many different circumstances. The Do it Yourself landlord may want to begin with a month to month lease in the event that being a landlord isn’t exactly what a person wants to be.  If maintaining property ownership is in question, then the month to month may be a good option.

  • The landlord is not bound long term to a lease payment amount: There are times when the lease agreement is for a certain amount and over the life of the lease the property could have been leased for more prior to the end of the lease. The month to moth lease gives the landlord the liberty to raise the rent if need be with as little as a 30 days notice.

Cons of a Month to Month Lease:

  • The landlord is at risk of frequent vacancy: This risk involves the freedom the tenant has to give 30 days notice before vacating the property. This has the potential to result in unstable tenants with increased cost to the landlord. Those cost can include but are not limited to getting the property ready for lease more often, advertisement for new tenants, and more frequent vacant months.

  • The landlord is at risk of irresponsible tenants: The month to month lessee is less likely to be concerned with maintaining the property they are leasing. The property could suffer as a result of a tenant that doesn’t maintain the property at a sufficient level of repair. A month to month lease could encourage this irresponsibility in a tenant.

  • The landlord is at risk of property devaluation: The typical one to three year lease gives the landlord a measure of security with his or her property. The tenant is locked in to a lease rate that cannot go up but neither can it go down. The consistent income from a long term lease is it provides a sense of safety for the landlord.

    The landlord must determine by each situation individually if a month to month lease is appropriate. The risks involved must be considered and caution taken prior to entering a month to month agreement.

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