A Boston Property Owner's Guide to Month-to-Month Lease Agreements

Updated July 2, 2022.

Have you thought about a month-to-month lease for your tenants? A month-to-month agreement is a periodic tenancy wherein the tenant rents from the owner monthly. This type of tenancy provides a renter and rental property owner with a degree of flexibility when a lease agreement ends. 

Is a month-to-month lease agreement right for your rental property? Of course, some renters would rather have a short-term lease over a standard lease agreement—but before you go that route, let's dive in a little deeper and look at what one of the best Eastern Massachusetts property management companies suggests are the pros and cons of this type of lease agreement.

What Is a Month-To-Month Lease Agreement?

A month-to-month rental agreement typically lasts, as the name implies, for 30 days (or one month). However, unlike a long-term lease, it involves an automatic renewal at the end of each 30-day period unless the tenant or real estate investor provides notice of non-renewal.

Legal document Month-to-Month Lease Agreement on paper (R) (S)

If renters choose not to renew their rental agreements, they can vacate the property by giving written notice at least 30 days before the end date of the monthly contract. The same holds for landlords, who also need to deliver 30 days' notice period to residents before the termination of a month-to-month tenancy.

A Long-Term Lease Can Convert to Month-To-Month

standard lease agreement can include a month-to-month option as a contingency when the original lease term ends. This is beneficial because it allows the tenant to stay in their home without committing to a long-term contract.

Some rental property owners may charge more monthly rent if a tenant chooses this option. However, it could be worth it to the renter if they don't have their next home ready for move-in when their existing rental agreement ends. 

Month-To-Month Leases Can Have Financial Benefits for Boston Owners

A month-to-month lease agreement provides some financial advantages for landlords. Property owners can charge more monthly rent amount if a tenant decides to lease month-to-month instead of signing a one-year lease. In addition, monthly leases allow flexibility to renters and owners. Neither party is committed long-term in case things don't work out. 

Why Would an Investor Implement a Month-To-Month Rental Agreement?

Investors might implement a month-to-month rental agreement to rent the house for more money if they believe there is potential for higher rent in a popular neighborhood. The property might also be a vacation rental that doesn't work well for long-term contracts with renters. 

Property owners might offer month-to-month agreements in university towns because students will be moving out at the end of the school year. With this kind of flexibility, investors can provide housing options for students year-round. 

Why Do Renters Prefer Month-to-Month?

For some renters, a month-to-month lease agreement allows them to move out of a rental unit at any time without incurring any penalties. This is ideal if they are between jobs or are a student about to graduate or go on break. 

What Are the Pros and Cons of Month-to-Month Leases?

A property owner should consider the pros and cons when considering a month-to-month lease agreement. Choosing the right experts with a property management company can help you determine whether monthly leases are right for your rental properties.

The Pros of Month-To-Month Leases

On the pro side, month-to-month leases allow landlords to act quickly if a bad renter needs to leave the property (without going through the eviction process). Simply letting the tenant know their monthly agreement ends 30 days in advance encourages them to leave. Peace of mind comes from knowing that you won't be stuck with a tenant who is either struggling financially or has been troublesome from the start.

Month-to-month lease agreements can also provide more rental income from higher rental rates, which can be an excellent relief for landlords who depend on this revenue stream.

The Cons of Month-To-Month Lease Agreements

The cons for rental owners and month-to-month leases include receiving short notice from tenants announcing they are moving out. With most monthly situations, property owners will only have about 30 days to find a new tenant and get the rental house ready to move in. 

Two Young Male Movers Carrying Cardboard Box From Truck (R) (S)

The uncertainty of a monthly situation also means the agreement is only temporary. As a result, property owners might not be able to depend on consistent monthly income when offering month-to-month rental agreements. 

A Boston Property Management Company Advises on Ideal Lease Terms

Month-to-month lease agreements provide plenty of advantages for both landlords and tenants. Before deciding, however, speak to a professional property manager to find out how you can use month-to-month contracts to your advantage! Our expert property managers at CHARLESGATE Property Management are always available to answer any questions about a residential lease agreement or professional property management services. Reach out soon to learn more about our hospitality-based approach to rental management!

For more details on creating a lease agreement, download a free copy of "How to Create a Custom Lease Agreement!"

CHG.Y1Q1.HTCL.Blog

Similar Posts

icon

Subscribe to Our Blog

Subscribe to receive real estate investment news and industry insights.