month to month or Year

Which leasing opinion do you think is best for renters and you as a owner month to month or a yearly lease?

Depends… We do both. For our out of state property, we do 1 yr leases. We wanted a low turnover rate there because my parents help out w/ showing the units when they’re vacant. For our local properties, we use m2m leases. The advantage of a m2m to you as a LL is you can give a 30 day notice in most cases for lease termination. Even if your tenant isn’t in violation of anything, you can give the notice and they’re supposed to vacate the premises. This could be useful if your tenant is a pain in your neck and you just want them out.
Even if you have someone on a year lease, they can always leave early. Lots of people (decent tenants) won’t just up and leave if they’re under a lease because they won’t want you to take them to court, however, it’s very hard to enforce a monetary judgement against a former tenant.

I agree with Justin…it depends. Month to month renters have less legal rights. It varies from state to state, but you can usually ask them to leave on 30-60 days notice for something as simple as a rehab, or if you want to move in.
Tenants on a lease agreement have more legal rights, but they are technically obligated to stay for the duration of their lease. I have had tenants who, for all intents and purposes, moved out, but they continued to pay their rent because they were under a lease agreement.
Sometimes, if a tenant wants to leave, and a lease agreement is in effect, you might just let them go. It beats having them get pissed off and tear all the doors off the hinges and punch holes in all of the walls.
When weighing your options keep these two things in mind:
1. Turns cost money. This is a time when you have to paint, fix
things, there is no rent money coming in, and you often have
to spend money to print up fliers or advertise. Tenants that
stay for years on end minimize these costly expenses.
2. You might want to offer month to month agreements like this:
A 1 year lease agreement is: (market rent)
A 6 month lease agreement is: (market rent + 10%)
A month to month lease agreement is (market rent + 20%)
So, you have the added expenses, but they are covered.

When a tenant wants to leave, they are going to leave no matterr what their lease says. When a tenant pays on time, but is selling crack cocaine and shooting holes through the ceiling when they are high, you need a month to month lease or prove all of this in court and hope the judge isn’t a liberal.


Leases are for collectible tenants. Everyone else gets month to month. There’s no reason to bind yourself with a lease when there is no way to force the tenant to pay if he leaves early.

These problems are what background checks are for. A guy that is bad and kicks holes in the wall didn’t just start kicking holes in walls when he moved into your property. He was kicking holes in walls for years. The background check will find that and you don’t let him in.

A successful rental is one that lasts 2 years. If they release for the third year you have hit a homerun. If they then buy the house from you after the third year you hit a grand slam.

If you always bunt you will never hit the grand slam. If you always swing for the fences you will strike out a lot. Everything that you do should make an environment that makes that grand slam possible. Everything from the rehab to tenant selection, to lease terms.

1 year leases allow them to stay longer and dig in and make the house their home. It also allows you to raise the rent every year setting an environment that when you approach them in the third year and offer to sell them the house, the rent is close to if not greater than what their note would be.

So how does a month to month lease work becasue I know tentants are not required to sign lease papers every month?

A month to month lease is called a tenancy at will and it continues in perpetuity until canceled by either party. It is like a job. You are employed until you quit or are fired. m2m tenancies do not renew each month just like you are not re-hired every payday.

You don’t terminate a m2m tenancy by sending a notice of non-renewal. It is a called a notice to quit with legal requirements for both the form and the service. The language is something along of the lines of “your tenancy is terminated”. It doesn’t say anything about not renewing.

If you want to change the terms of the m2m agreement, then you must terminate it and offer a new tenancy with the new terms.