The majority of leases are typically for a 12-month time frame. After that 12-month lease expires, tenants can enter a month-to-month tenancy unless a completely brand new contract is negotiated and signed.
However, there are circumstances whereby a tenant and landlord agree on a special short-term arrangement. In fact, there are rentals available on a month-to-month basis, though they’re harder to find in comparison to long-term leases.
This type of lease arrangement certainly isn’t right for everybody, but it just might be the perfect setup under the right circumstances.
Before you sign on as a month-to-month tenant with your landlord, be sure to weigh out the pros and cons first.
Pros of a Month-to-Month Lease For Tenants
Some renters like the idea of a shorter-term lease for a number of reasons, including the following.
They offer more flexibility. Perhaps the biggest benefit of being on a month-to-month lease is the amount of flexibility you are afforded. If you happen to change your mind about the place for whatever reason, you can get out of the lease by the end of the month, no questions asked.
Whether you got a great job offer across town, just graduated from college and don’t know what the future holds, or are new to the area and want the ability to feel out a particular neighborhood before committing, a short-term lease may be ideal. You’ll be given the flexibility and freedom of mobility to pack your stuff and move onto your next abode without worrying about being on the hook for breaking your lease early.
There’s no financial penalty for breaking the lease. Signing a 12-month lease puts you in a position to be legally bound to the timeline of the contract. Should you vacate the premises before the 12-month period is up, you’ll be legally responsible for providing your landlord with the full 12 months of rent (with certain exceptions), regardless of whether or not you still live there.
Renting as a month-to-month tenant, on the other hand, does not make you obligated to make such payments if you move out early. If you’re expecting to have to move before the year is over, you may be better off with a month-to-month lease instead, which can end up saving you a good chunk of change.
They can always be turned into to a long-term lease. If you end up loving the place, or don’t have anything happening in the foreseeable future that would require you to move, then you can always convert your month-to-month lease into a more long-term one.
By then, you’ll have been given the chance to get a feel for the home and area without committing yourself to it, after which you can settle down to a degree with a longer-term lease.
Cons of a Month-to-Month Lease For Tenants
Among with all the advantages that a month-to-month lease brings, there are also some downfalls to this shorter-term arrangement that warrant attention.
They lack stability. The flexibility that you may enjoy as a short-term renter also extends to the landlord. You may have to find a new place quickly if your landlord wants you out. It would be very inconvenient if you got nicely settled into your new place only to have your landlord suddenly require the unit to be vacant by month-end. This will leave you scrambling for a new place to live, which can make it tough to find availability on such short notice.
Your rent can be raised at any given time. Since you’re not locked into a long-term lease, your landlord can legally increase your rent any time (though you must be given at least 30 days’ advance notice if the rent increase is 10% or less). There’s really nothing stopping your landlord from increasing your rent from one month to the next, which could do some damage to your wallet.
They can be more expensive. Generally speaking, property managers charge higher rental rates for short-term leases because they are more likely to have to spend time and money filling in vacancies given the potential for a higher turnover rate. That means you could end up paying more in rent on a month-to-month lease. If your lease is renewed every month over the long haul, you’ll probably be paying more than you would with a more traditional 12-month lease.
They’re tougher to come by. Most landlords would rather deal with longer-term leases for the simple fact that it ensures that they won’t have to turn the unit over and over again, which costs time and money. Every time a tenant moves out, the landlord needs to market the property and get it ready before the next tenant moves in. As such, short-term leases can often be more expensive to carry, which is why they’re nowhere near as widely available as 12-month leases.
The Bottom Line
If any of the cons mentioned above cause you to lose sleep, then perhaps a month-to-month lease is not right for you. On the other hand, if you can live with the idea of being put in a position to find another place fast in favor of the ultimate in flexibility, then a short-term lease might be the way to go. This is especially true if you’re not one to stay put in one place for very long, and have a job and/or lifestyle that has you hopping from one place to another.