As a landlord, finding the right rental agreement that works for you and your tenants can be a challenging task. One option to consider is a month-to-month rental agreement, which offers greater flexibility than traditional long-term leases. However, with the added flexibility come potential drawbacks such as increased turnover and uncertainty for both parties. But what if you could enjoy the benefits of a month-to-month agreement while minimizing the drawbacks? That’s where Vremco LLC comes in. Our advanced technology and highly skilled remote team members work with a team of professionals to help landlords save 50% or more on property management costs, while providing the flexibility of a month-to-month rental agreement. Let’s take a closer look at the benefits and drawbacks of month-to-month rental agreements, and how Vremco LLC can help you navigate this option.
As a property manager or landlord, you have the option to offer a fixed-term lease, such as 12 months, or a month-to-month lease agreement. A month-to-month lease agreement renews every month until either the landlord or tenant decides to end it by providing a 30-day notice to vacate. This type of lease can be used to extend a current tenant’s lease who may not be ready to move out or renew their fixed-term lease yet or signed with a new tenant.
If you’re considering offering the option of a month-to-month lease to your tenants, it’s important to consider the advantages and disadvantages. The benefits of having month-to-month lease agreements include:
Automatic renewals: Unless either party gives a notice to vacate, a month-to-month tenancy typically renews automatically. This simplifies the process since no action is necessary unless the landlord or tenant wants to make changes to the terms.
Flexible end dates: Renters appreciate flexibility, whether it comes to your pet policy or lease term length options. With no set end date to a month-to-month lease, the lease can end whenever the landlord or tenant wants it to, as long as either party provides proper notice.
Increased rent price: If you rent to a tenant month to month, you can technically change the price of rent every month. Landlords typically charge more for month-to-month agreements from the start because they’re not as stable as fixed-term leases. The increased rental income landlords receive from month-to-month leases helps to balance out any risks that may come with this lease length.
Landlord can terminate lease: Offering a month-to-month tenancy is not only flexible for the tenant but for the landlord as well. If you no longer wish to have your unit tenanted, you can send a notice to vacate to your tenant. This is especially convenient if you plan to renovate or sell your rental in the future and need it to be vacant within a month’s time.
Keep good tenants for longer: If you have great tenants who aren’t ready to sign or renew a fixed-term lease, offering the option of a month-to-month agreement is a great way to keep them longer until they either sign another fixed-term lease or move out. This will save you from having a vacant unit and finding a new tenant, at least for a while.
However, there are also drawbacks to month-to-month tenancies, including:
Lack of stability: Month-to-month leases can lack stability, whereas fixed-term leases often attract quality, long-term tenants who pay rent on time, take care of the rental, and pose less of a flight risk.
Short notice for move-outs: If you rent on a month-to-month basis, all your tenant is required to do to end the lease is provide you with proper notice. The length of their notice is typically 30 days, but you should check your state laws to confirm.
Landlords can charge a higher rent for a month-to-month lease, but if the rent is too high, it may discourage potential tenants from signing a month-to-month lease, leading to a vacancy. As a landlord, you generally need to give your tenant a month’s notice to vacate before terminating a month-to-month lease. However, some situations may allow you to terminate the lease without notice, such as if the tenant is engaging in illegal activities on the property or not paying rent.
In summary, month-to-month leases offer flexibility for both landlords and tenants, but they come with their own set of risks and considerations. If you’re unsure about offering month-to-month leases, consider offering them as an option on lease renewals or for tenants who may not be ready to commit to a fixed-term lease. Ultimately, it’s important to carefully weigh the pros and cons and make an informed decision based on your unique situation and goals as a landlord or property manager. By doing so, you can ensure that your rental property remains profitable, and your tenants remain satisfied.