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Author Topic: 1 year lease or month to month???  (Read 2767 times)

Offline TARealty

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1 year lease or month to month???
« on: January 27, 2007, 01:11:04 pm »
I just purchased my first investment property. It is a single family home and I will be renting it out.
Is it advisable to require prospective tennants to sign a one year lease or rent from month to month?
I was speaking with another investor who rents out single family homes and he said he always uses month to month contracts. His reason is that if you get a
deadbeat tennant (and it happens no matter how well you screen) you can boot them out in a matter of a few days whereas with a one year lease, it could take months to evict someone, all the while losing rental income.  Pros /Cons of each and what do most people on here use?    Thanks!

Offline Teksch

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Re:1 year lease or month to month???
« Reply #1 on: January 27, 2007, 03:00:26 pm »
I think that your contact is leading you the wrong way. Eviction is not dependent on the terms of the rental. There are legal ways to evict someone but whether or not they are on a month-to-month (called a periodic tenancy) or a long term lease (called a tenancy for years) has nothing to do with it. If the tenants are in violation (didn't pay the rent), you have to use the same legal devices in either case. Probably what your contact was thinking was that a lease is harder for a landlord to break than a month-to-month rental. Not true - if the tenant is in violation they be evicted in either case.

Offline propertymanager

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Re:1 year lease or month to month???
« Reply #2 on: January 27, 2007, 03:25:55 pm »
Teksch,

In theory and in a perfect world, you would be right.  However, in reality this is wrong.  Evicting someone for non-payment is the same regardless of the term of the lease.  However, in reality, evicting someone for other lease violations can be MUCH more difficult.  I make the tenants in my nice SFHs sign a one year lease and my low income tenants sign month-to-month leases.  That way, I can keep the good tenants on the hook for a year and I can give the more iffy tenants a 30 day notice to terminate.  

Mike
www.1MinuteToRentalPropertyRichs.com 
This No-Hype, No-Nonsense Book is a step by step course in making money and building wealth with rental properties!  Everything from buying properties at a discount to dealing with terrible tenants.  Now In Paperback!

Offline TARealty

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Re:1 year lease or month to month???
« Reply #3 on: January 27, 2007, 11:51:15 pm »
Ok, say I have a tennant who is on month to month and won't pay rent. Couldn't I terminate the lease and tell him I want him out in 30 days and be done with him as opposed to a tennant with a one year lease who could stay in the home for months until eviction proceeds through the courts?

Offline propertymanager

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Re:1 year lease or month to month???
« Reply #4 on: January 28, 2007, 05:26:01 am »
Evicting someone for non-payment of rent is the fastest way to evict someone in most states.  Here in Ohio, you give the tenant a 3-day notice for non-payment of rent, while virtually everything else requires a 30 day notice.  The court date is usually about 2 weeks later and the setout MUST be within 10 days (by law).

If someone doesn't pay rent and you give them a 30 day notice (like you are giving them notice that the lease is terminating), why would they leave?  They are already staying without paying.  Non-paying tenants usually stay until they are forced out by eviction.  The only thing that will do is give them another 30 days of free rent.

Mike
www.1MinuteToRentalPropertyRichs.com 
This No-Hype, No-Nonsense Book is a step by step course in making money and building wealth with rental properties!  Everything from buying properties at a discount to dealing with terrible tenants.  Now In Paperback!

 




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