Tenant Wants To Go Month to Month Lease


I have a tenant paying $1500/mo currently. The lease renews in June. She wants to go month to month. Is there a formula for calculating what the month to month costs should be? Thanks in advance.


All my leases go month to month after end of term at same rate. Not sure what you mean by formula for that? Haven’t had any problems with keeping people after that point as only lost renters from then on to life changes like job moving out of town. Plus didn’t want my renters to put serious thought / family drama of hmmm should I commit to another 12 months or is now finally the time to make a change.

Every lease renewal, regardless of the term, should have a rent increase based on the Cost of Living Index (CPI). The tenant should still sign a lease stating that the lease is month to month. In this way, you both know where each other stand legally speaking. The rent, however, should not be higher just because it is a month to month lease - it is still market rent.

Interesting point about CPI adjustment. How does that work in detail? Here the rent market went down big in 2008 - 2009 then down a little past few years due to oversupply so I don’t approach about raising rents. At some point it’ll turn then I will seek yearly adjustments and not sure how to approach tenants about this.

Our lease states we can renegotiate rent during the m2m term. All we do is give the tenants a letter with the new rent amount starting at least 30 days from the date of the notice.

If the landlord goes month to month after the lease is up, that is common. However, if the tenant requests to go month to month when the lease is up, the tenant knows they will not be staying.

Your tenant is going to buy, or is looking for a new job out of the area. Or, I suppose, a divorce is in the near future.

You get to decide whether you want the tenant for a few more months, or whether you want your vacancy now.

Me, I can get a new tenant in June, but if my current tenant gives notice in September and the vacancy isn’t until October, then it will be more difficult to replace the tenant. If the vacancy is in November, i might be months obtaining a new tenant.

Try asking why. Sometimes the tenant will tell you why they don’t want to sign a new lease.

I’d suggest using comparable rental properties that are rented out in the short term housing market in your area as a means to reprice your tenancy at will lease with your current tenant, it’s the best means of comparison and measurement of value at your disposal.

In the end, a tenant only decides not to renew a lease for two reasons; something “changed” for the tenant or the tenant wants the change. You are offering the tenant a convenience that is priced at a premium in the markets I’m familiar with, and you might consider this as a fair market approach to arriving at a M2M lease value.

Hope this helps,

Scott Miller

Some tenants just prefer month to month. Myself, on a 1500/month property I would ask for a $150/month premium for allowing that to happen. If they ask why I would tell them that you are expecting higher vacancy costs with month to month rents.

It’s the same for me. People don’t look at rental property during the holidays at all. It’s slow until spring, and spring and summer are wonderful with rentals. June is just about the optimal time for a rental to come available. Sometimes I put people on a 6 month or 18 month lease just to get renewal back to where I want it.

that’s pretty reginal though. If you are renting to college students around here it’s Aug 1 or nothing. They are dead over the summer.

The Consumer Price Index is created by the Bureau of Labor Statistics. They are released monthly. So, lets say that the lease expires in April. Then you would check the April report and look up the “Unadjusted Price Change” from April 2013 under Housing:Rent of Primary Residence. This is the percentage of rent increase. On April’s report the CPI under this category is 2.7%. If it goes down, I simply send the tenants a nice letter thanking them for being such a good tenant and as a reward I will leave the rent the same. They are overjoyed.