Is a Month-to-Month Lease Better for Landlords?

Being a landlord means you'll be facing situations during which your decision-making skills will be frequently tested. One of these dilemmas will be between choosing to implement a month-to-month lease versus a fixed-term lease.

Each type of lease entails different benefits and drawbacks. This article will focus on the upsides and downsides of picking a month-to-month lease. Hopefully, it will allow you to reach a decision that's comfortable for you.

What is a month-to-month lease?

A month-to-month lease is a flexible term that allows a landlord or renter to issue at least 30 days of prior notice. If there are changes or desires to end the tenancy, it's then easier to proceed, given the short period of notice. Rent is then paid every month. Usually, vacation homes practice a month-to-month lease.

What are the advantages of a month-to-month lease?

Below are the benefits each party of the rental contract can maximize from a month-to-month lease.


1. Rental Price Adjustment

Implementing a month-to-month lease provides landlords with an opportunity to increase the rent. Suppose there's a sudden demand for rental housing in your property area.

You then don't have to wait a year or so to adjust the rent price. Thus, you can increase your income readily. This also offers a quicker return on investment.

2. Replacing Problem Tenants

Another upside to a month-to-month lease is quickly ending a tenancy when a renter turns out to have behavioral problems. Sometimes, it's difficult to pinpoint how a tenant will behave until he's residing in your rental unit. The best thing about a short lease is you can opt to disapprove of the renewal, given your bad experience. You don't have to needlessly suffer for a longer period, especially when it comes to the ones causing a nuisance.

3. Suited to Demographics

When your rental property is located in a college town or nearby attractions, most people will be looking for transient rentals. That is, if your property is in a university belt or college town, most tenants are students. They'll often go home once the school year or semester ends.

On the other hand, tourists will also only stay for a shorter period. Therefore, applying a month-to-month lease is more favorable in this case.


1. Relocation

Sometimes, a tenant may be working in the sales field. This requires him to be mobile and move from location to location, depending on his company assignment.

At other times, some tenants may also be waiting for the completion of home construction. These situations are temporary. Hence, a tenant will find it more convenient and preferable to stay on a month-to-month lease.

2. Warm-Up

Signing a fixed-term lease is a huge commitment for most people. Some opt to play it safe and want to get a feel of the neighborhood first. If a rental property sounds good on paper, but upon trying to live there, it fails to meet the renter's expectations, he can move out quickly. Also, if there's no rapport between the landlord and the renter, a month-to-month lease provides this flexibility. It's also useful for the renter to have a leeway to help make the right decision.

3. Flexibility and Zero Penalties

A fixed-term lease only has certain conditions permissible for breaking a contract. This can pertain to harassment by a landlord, domestic violence or exposure to hazardous conditions. Due to this limited nature, a tenant may face consequences for the breach of contract.

When life situations dictate a tenant's need to move, it can be difficult. A month-to-month lease gives the assurance of avoiding stiff penalties and being subjected to a lawsuit.

What are the disadvantages of a month-to-month lease?

Below are the drawbacks each party of the rental contract can experience from a month-to-month lease.


1. Income Uncertainty

A consistent income is always desired. It allows you to plan for upgrades and additional property investments. If you have a month-to-month lease, however, predicting your income is rather difficult. Thus, you need to save up first for property construction projects.

2. More Tenant Screenings

A month-to-month lease exposes you to more frequent turnovers. This means you'll be conducting more than your fair share of tenant screenings. It takes extra effort and time for the landlord to ask for pertinent documents and assess them. Not doing so can also lead to conflicts such as undesirable criminal background or violent tendencies.

3. Frequent Marketing Activities

Due to the temporary nature of a month-to-month lease, the landlord has to engage in many marketing campaigns. A one-month notice can lend pressure given that vacant units require maintenance expenses. Marketing has attached costs to them in terms of time and money. Thus, a landlord can expect a huge chunk of his resources to be dedicated to marketing his rental space.


1. Rent Price Adjustment

A month-to-month lease allows landlords to raise the rent price. This is bad news to a renter who wants to continue his tenancy. He has little say in the matter when the landlord decides to do so. He'll either agree to the rent raise or move out and find another rental space.

2. Policy Changes

Similar to the rental price adjustment, a tenant has little time to adapt to any new policy a landlord may implement. A month-to-month lease gives a greater degree of flexibility to the landlord when altering policies. This may refer to extra charges, changes in accepting visitors or curfew hours for younger tenants.

Bottom Line

Going for a month-to-month lease depends on a landlord's needs. He needs to ask himself:

  • Does the flexibility suit him?
  • Can he manage the unpredictable income?
  • Does he have more time to check the market demand for rental homes?
  • Does he have spare time to conduct marketing activities and screen new tenants?

If yes, then a month-to-month lease is certainly more beneficial to him. If you're looking for this type of short-term lease without the hassle, you can contact Suncastle Property Management. We can be reached at (904) 686 2641, or you can visit our website at

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