Lease Term or Month To Month?

Lease term or month to month?  Which is best for me?

Long term leases are most commonly used for single family homes. Longer term leases give tenants and owners the security that the rent and the terms within the lease will not be changed until the lease ends.  Ending such a lease before the term has ended would result in a lease break fee stated in the terms of the lease ( usually 1.5 times the total monthly rent).  Owners are also subject to paying the lease break fee to the tenants if they should break the lease as well.  Lease terms are usually 1 year, sometimes 2.  Leases generally benefit only the tenant.  It is harder to get tenants out under a lease due to the terms stated within a lease therefore, it is best to stick with 1 year at a time. This way as an owner, you are able to adjust rents and other terms at the end of the lease term.  As the economy changes this can become very important to stay within the current rental market for your home.  If your not happy with your tenants you would have to wait until after the year lease is up, only then would it  be possible to ask them to vacate.  It is not possible to give a no-cause notice to vacate while under a lease term.  Tenants have to actually violate a term in order to be able to give vacate notice while under a lease.  Keep in mind that after 1 year of tenancy, tenants are required to get 60 days notice to vacate.

Short term tenancies, also called at will tenancies or month to month are most commonly used for apartments, rooms, plexes and multi family homes.  However, if a lease term ends and nothing is done to create another long term lease, that agreement automatically changes to a month to month tenancy.  These types of terms are beneficial to the owner because terms can be changed with just a 30 day notice.  Its easier for an owner to get a tenant out under a month to month rental by simply giving a no-cause notice to vacate with the proper days notice included. Month to month tenancies gives the owner more control over their rental and allows them to make necessary changes such as raising rents or adding yard care services, etc. to the terms. As the economy changes and bills go up, this could be important to the owners pocketbook and allow them to make necessary remodels and or improvements to the home as needed.

So yes, its nice to know that you got a long term lease and that you will receive compensation if that lease is broken, but these long term leases come with some disadvantages of their own.  And just because a tenant is under a lease doesn’t necessarily mean that they will never have to move during that term.  Sometimes, such as estates etc. a house needs to be sold and that term will be ended by the family and the lease break fee is calculated into the equation at the time of sale.  I usually remind my tenants that while renting a home, anything can happen and moving is all part of being a renter.

Let Tri County Management, LLC be your management co.  We provide excellent care of your home with a personal touch.  The TCM experience is a one on one management process that will allow you, the owner to still make decisions and still be a voice for the property.  TCM will advise you and give suggestions, but the end decision is yours! Let us help you today with your rental properties…Lets manage together!

2 thoughts on “Lease Term or Month To Month?

  1. Its such as you read my thoughts! You seem to understand so much about this, such as you wrote
    the ebook in it or something. I believe that you just could do with a few % to pressure the message home a bit,
    but other than that, this is fantastic blog. A fantastic read.

    I will certainly be back.

  2. Really good piece of writing.Thanx with regard to creating this specific informative blog post plus enlightening us with all your ideas.I’m hoping you will definitely keep on this unique good work in future as well.

Leave a Reply

Your email address will not be published. Required fields are marked *