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

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

When renting out a property, landlords face an important decision: should they opt for a traditional long-term lease or consider the flexibility of a month-to-month lease? 

Each leasing option carries its own set of advantages and drawbacks, making it a decision that merits careful consideration. 

In this blog post, we explore whether a month-to-month lease is a better choice for landlords. 

We'll examine the benefits, drawbacks, and potential middle-ground solutions, providing the insights you need to make an informed decision.

What Is a Month-to-Month Lease?

Before we delve deeper into whether a month-to-month lease is better for landlords, let's clarify what it entails. 

A month-to-month lease, also known as a month-to-month rental agreement or a periodic tenancy, is an arrangement that allows tenants to stay on the property on a month-to-month basis with no fixed end date. 

This means that either party can terminate the lease with proper notice, usually 30 days in advance.

What Sets Apart a Month-to-Month Lease from Lease Renewal?

It's essential to distinguish between a month-to-month lease and a lease renewal, as they serve different purposes and have distinct characteristics:

Month-to-Month Lease

A month-to-month lease provides flexibility for both landlords and tenants. This type of lease allows the agreement to continue indefinitely as long as both parties are in agreement.

Termination is straightforward, with either party able to end the lease by providing typically 30 days' notice. Rent adjustments can also be made with the same notice period, allowing for market changes or other factors to be taken into account. 

In essence, a month-to-month lease offers tenants the freedom to move out or stay on a short-term basis, making it a versatile option for both renters and property owners.

Lease Renewal

Lease renewal is a process in which an existing lease is extended for a fixed term, like another year or several months. This arrangement offers continuity to both landlords and tenants, maintaining the existing rental terms. 

Rent stability is a key feature, as any adjustments are typically negotiated during the renewal. However, it necessitates a longer commitment from both parties, ensuring stability but limiting flexibility in the short term.

What Makes a Month-to-Month Lease a Desirable Option?

A month-to-month lease can be an appealing choice for landlords for several compelling reasons:

Tenant Flexibility

One of the main reasons landlords might consider offering month-to-month leases is to attract tenants who value flexibility. Month-to-month leases are ideal for students, seasonal workers, or individuals uncertain about their plans.

Adaptation to Market Conditions

A month-to-month lease can benefit landlords who want to keep up with changing market conditions. This flexibility allows for adjustments in rent prices as the local rental market fluctuates. 

In a competitive market, landlords can increase rent to match the demand, while in slower periods, they can lower rent to attract and retain tenants.

Easier Terminations

Ending a month-to-month lease is often less complicated than terminating a long-term lease. 

While long-term leases may require specific reasons for eviction and an extended notice period, month-to-month leases usually necessitate only a 30-day notice in most jurisdictions. 

This simplifies the process if you need to regain possession of your property.

Property Evaluation

Month-to-month leases can also serve as a trial period for both landlords and tenants. If you're unsure about a prospective tenant, offering a shorter-term lease can help you assess their suitability. 

Similarly, tenants can evaluate whether the property meets their expectations without committing to a long-term lease.

What Makes a Long-Term Lease a Desirable Option?

While we've explored the benefits of month-to-month leases, it's also essential to consider the long-term lease perspective. Long-term leases, typically lasting a year or more and offer several advantages that landlords may find appealing such as:


Long-term leases offer a level of stability that month-to-month arrangements may not provide. If you have a reliable tenant who is willing to commit to a one-year or more extended lease, it can ensure consistent income and reduce the frequency of finding  new renters.

Rental Income Predictability

A long-term lease allows you to know exactly how much money you will earn from renting a property for a period of time. 

This can help you keep track of your finances and plan for your future. A short-term lease does not provide the same financial stability.

Tenant Turnover

Month-to-month leases often result in more frequent tenant turnover. While this can sometimes be a positive aspect, as it allows you to make necessary property improvements or adjustments more frequently, it also means you'll need to invest more time and effort in finding new tenants.

The Middle Ground: A Compromise

So, is one option definitely better than the other for landlords? Not necessarily. It ultimately depends on your specific goals, circumstances, and the type of property you own. In many cases, a middle-ground approach might be the ideal solution.

Consider offering tenants the option to choose between a one-year lease and a month-to-month lease. This provides you with a degree of stability while also accommodating tenants who prefer flexibility. It's a win-win situation that can help you attract a wider range of renters.

Bottom Line

In the landlord-tenant relationship, there is no one-size-fits-all solution. Whether a month-to-month lease is better for landlords depends on their unique situation and preferences. 

The flexibility of month-to-month leases can be a significant advantage, allowing landlords to adapt to changing circumstances and market conditions. 

However, long-term leases offer stability and predictability that may appeal to those seeking consistent rental income. To find the right balance, consider offering a mix of lease options. 

Your choice between month-to-month and long-term lease should align with your unique goals and circumstances as a landlord. Reach out to the experts at Envy Property Management for more information.