“What You Need To Know About Month To Month Lease Agreement”
Are you considering using a month to month lease agreement for at least one of your rental properties?
There are several advantages (and disadvantages) to using a month to month lease agreement. You have to weigh the pros vs the cons and see if it’s the best choice for a particular property or situation. Fundamentally it comes down to whether having the flexibility to end a lease easily works for you (and your tenant).
That’s why today I want to talk to you about the month to month lease agreement.
The Month To Month Lease Agreement
The rental lease agreement is the legal document that spells out the terms and responsibilities of the tenant and landlord during the rental of the property. Lease agreements have different types depending on the type of property and the way the landlord determines they want to rent the property.
Often times the main difference for a lease agreement is dependent on how long a tenant will stay in the property. Other differences in lease agreements come from the type of renters and if the property is commercial or residential. In many instances, almost all leases are signed for a specific period of time and are defined as fixed term leases or month to month leases.
Often when renters sign a lease for the property they are renting it is common for the tenant to want to stay in a rental unit for a long time. However, not all tenants desire a lengthy contract for the property they will be renting. Instead, they request or look to find short-term rental contracts due to their lifestyle and other factors like being relocated due to their work.
The month to month lease agreement is most commonly the lease that targets consumers or tenants that do not want to have long-term commitments to the property they are renting. Additionally, the month to month lease is the most preferred by landlords who use the desire to keep rental contracts short so they can be renegotiated for higher rents or different terms when needed.
The month to month lease agreement will be broken down and evaluated in this article to help you determine if it is the most desirable lease for the properties you are renting…
What Is A Month To Month Lease Agreement
A month to month lease agreement, just like any rental lease agreement, focuses on the duration of the tenant’s stay in your rental property. Just like what the contract name suggests, the terms and responsibilities spelled out by the lease and it is meant to be used only for a month to month period.
The month to month lease agreement is used when you desire a short-term lease for the property and allows the tenant to leave and break the lease with a written notice at any point during the month to month term. However, even with a month to month term lease the tenant is still legally required to give 30 days in advance notice if they wish to break or discontinue the lease.
The landlord or property manager also has the ability to break or terminate the agreement if you wish but this also requires a written notice of termination that must be given 30 days before terminating the agreement.
A month to month lease is signed and in place for the first month of the contract for rental of the property. If the month to month lease is not renewed or renegotiated, in almost all cases, it will automatically renew according to for terms and be in place until the tenant or landlord terminates the rental of the property.
Benefits Of Having A Month To Month Lease Agreement
Having a month to month lease agreement can give benefits to a property manager and the tenant signing the lease.
Let’s first look at the benefits of a month to month lease for the property manager or landlord of the rental property.
With a month to month lease agreement, property managers and landlords can increase their rents when the market dictates. Rental properties are strategically located in an area where rent amounts can fluctuate up and down. As a result, it leaves you with an option to increase or maintain your rents.
Monthly leases can also attract lower income tenants because of the flexibility it offers. They won’t be tied up with an agreement that will last more than a year. They will only pay for a whole month and that’s it. If they can’t pay anymore then they can easily terminate the contract.
The main benefits of a month to month lease for a tenant are that the length allows them flexibility and ease of moving or changing locations if needed. Often times workers who are required to travel or change work locations frequently will need a place to live where they will not be tied up with it for a long time. They commonly look for rentals where it can adjust to the needs of their work most especially when they go from one place to another.
Another type of tenant that commonly requests or looks for a month to month lease is for students. College or university students may often be away from their home and require a place to live that’s close enough to their college or university. Since the school year doesn’t normally last an entire year they look for a rental property that allows them to move easily or go home from time to time.
These factors can be very useful in determining if you want to offer a month to month lease versus a long-term lease for the properties that you are managing.
Another and important factor in determining if you want to have a month to month lease is the flexibility it allows you in removing non-paying tenants. Additionally, a month to month lease gives your tenants the flexibility to terminate the agreement with you and leave the property if they wish to do so.
How The Month To Month Lease Agreement Works
Of course, just like what its name states, month to month lease agreements are structured so that the contract will end after a month. This agreement will also automatically renew each month as long as the tenant stays on your property.
Although termination by either party is allowed (even halfway through the contract) a 30-day notice is still required. Either party who wished to end the contract must provide a written notice of termination. The notice should be given 30 days in advance to the other party.
Property managers can typically increase the rent for month to month agreements, depending on what the market allows. What can also happen, however, it’s possible for tenants to negotiate the terms. A clause can be added to the monthly lease that can help guarantee that the rental amount will not increase for a certain period.
Having that clause can also serve you because it can help tenants stay in your property for longer periods.
Where to Get Month To Month Lease Agreement Examples
If you’re planning to have your own month to month lease agreement, you can easily get some examples from the ever-reliable search engine called… Google. The monthly lease agreement can be downloaded for free online. It is also printable.
Formats of this agreement can be in PDF, Word, or Excel. It can be a pre-made template or a customizable one. The choice is yours. However, some sites don’t offer a month to month lease agreement for free. That’s probably because they provide other features that you may want to consider when it comes to your lease.
Here are direct links to sites where you can get a month to month lease agreement:
Final Thoughts On What To Know About Month To Month Lease Agreement
In this blog post, we talked about the month to month lease agreement. There are certain advantages (and disadvantages) that may make the month to month lease agreement appealing to you, the particular property, and the tenant. Take the time to carefully weigh them out and make the best decision when everything is factored in.
If it makes sense, there can be several advantages to having the ability for you or the tenant to terminate the lease with only 30 days notice.
If you have any questions or thoughts about the month to month lease agreement then please add them to the comment section below.
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