Month to Month Leases: What You Need to Know
Feeling a bit fluid and spontaneous when it comes to your living situation? If your needs dictate, you may wish to explore lease options other than the typical 12-to-18 month rental period.
Whether you’ve taken a temporary job, plan to travel for an extended period, or simply don’t know where you’ll choose to live in the near future, you may enjoy the flexibility that a month-to-month lease offers.
It’s important to note, however, that a month-to-month rental agreement isn’t for everyone. Read on to consider your options before you commit.
Benefit: More Flexibility for the Renter
The single biggest benefit of a month-to-month lease is the flexibility to move — without penalty — almost as soon as you want. With a typical 12- to 18-month rental agreement, lease terms usually dictate that residents who break a lease earlier than the contract allows must pay early termination fees. Keep in mind that the legal expectation is for the renter to pay for the full 12-month period.
Not so with month-to-month agreements, which are kind of like signing a new lease every month. Typically, the lease is set to renew automatically for another 30 days, until the renter gives a 30-day notice of intent to move out.
Drawback: Property Management Has More Flexibility, Too
Because month-to-month agreements offer greater flexibility for renters, it’s only fair that they also offer more flexibility for landlords. Because property owners prefer stable, long-term residents, they may charge more for short-term leases. Before you balk, consider that it’s fairly expensive to repair and prep a unit, plus advertise to find a new renter each time a resident moves out. Because a short-term rental represents more work (and more money) for management, they have to factor in these costs when they set short-term rental rates.
Month-to-month leases also allow property managers to raise rents with only 30 days notice, meaning that if you stay in a month-to-month agreement for several months, your rent could change. Property managers may also terminate month-to-month leases whenever they choose, after giving the appropriate, typical 30-day notice.
Even with higher rents, if you anticipate needing to leave your apartment before a year-long agreement expires, it may be more cost-effective to pay the higher month-to-month rent than to break a year-long lease.
Time Offers Its Rewards
When you’re ready to go from spontaneous to stable, the good news about a month-to-month lease is that most property managers are happy to convert short-term leases into standard 12-to-18 month leases. Making the switch from month-to-month renter to long-term resident means you get to lock in a rental rate for that period, as well.