A month to month lease can often appeal to tenants who do not see themselves living in a particular location for the long term and favour the idea of a short term lease. There are a range of pros and cons for the month to month lease and it is best to be well aware of what form of rental lease agreement suits your short term and long term goals. This will help you sort through the various homes on the market.
The Pros and Cons of a month to month lease
Pros for a month to month lease:
There are a few reasons why you may need the option to move on at any minute’s notice. Apart from you being a spy, the most likely is that you need somewhere to stay in the short-term. For instance, following the sale of your previous property or if you are new to the town or city. Month-to-month leases allow you to get a feel for your home as well as your neighbours, the neighbourhood in general, and your landlord. Your job situation will also dictate whether you may prefer a month-by-month arrangement.
2. No charges.
As part of this flexible arrangement, you are immune from any charges when you move on. You do still need to provide your landlord with a letter stating your intent to finish your lease. This must be 28 days from the date that the landlord receives the letter. Compared to breaking a fixed-term lease, this won’t break the bank.
As long as your landlord is open to it, month-to-month leases can become fixed-term leases. The most common of these are leases of six or twelve months.
So all in all, the ‘pros’ of month-to-month leases come under the one umbrella pro: flexibility. With changes to the market and different job types this may be the option for you. More often than not however a month-to-month lease is more beneficial to the landlord than the tenant.
Cons for a month to month lease:
1. More expensive.
As a nod to the above comment, landlords often increase their rent in two ways.
i. Higher rental costs compared to comparative long-term leases in the area.
ii. The fact that the landlord may try to increase rent while you are in the property.
Few tenants are aware that a landlord can only increase rent once in a six-month period. This goes for month-to-month lease arrangements as well. If you have a clause in your agreement stating the landlord is free to increase rent more than once in six months, you should seek professional advice from a tenants’ union.
This is flexibility’s alter ego. Just as you are flexible in a month-to-month lease, the landlord is free to end the lease arrangement with fourteen days notice from the end of the lease term.
3. Harder to find.
Landlords often want a long-term lease because of its inherent stability. They don’t want to worry about marketing and the headache of finding new tenants for their property. It is often much easier to find fixed-term lease arrangements.
However, there are sometimes instances of a long term lease becoming a month to month lease/short term lease after the fixed time period is complete. Be aware of when your fixed-term lease is up and decide whether you want to sign another or enter into a short term lease arrangement. If you don’t receive a letter from your property manager regarding this, remind them!
4. Sending a message.
Future landlords may see your rental history and how many times you have been on an month to month lease and judge you as being an unstable tenant.