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

Before you begin renting out your property or advertising it for new tenants, you need to decide what type of lease you want to offer your residents. Deciding on the type of lease to offer can significantly impact your rental business. While a 12-month lease offers stability, a month-to-month lease offers flexibility, which might be ideal for some rental property owners. 

This blog post will explore the pros and cons of month-to-month leases, helping you determine if this is the most suitable option for your rental property.

Understanding Month-to-Month Leases

A month-to-month lease is a rental agreement that automatically renews each month until either the landlord or the tenant decides to terminate it. Unlike fixed-term leases, which typically last for a year or more, month-to-month leases offer greater flexibility for both parties. 

This arrangement is beneficial for tenants who may need temporary housing and for landlords who want more adaptability with their rental properties.

Benefits of Choosing a Month-to-Month Lease

Month-to-month leases are appealing due to their flexibility and short-term commitment. They provide a way for landlords to quickly adapt to changing circumstances and market conditions. Let’s look into the specific advantages that make this type of lease beneficial for landlords.

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Higher Rent Potential

One of the primary advantages of a month-to-month lease is the potential for higher rental income. Since these leases offer greater flexibility, landlords can often charge a premium for this convenience. 

Tenants who prefer or need the flexibility of a month-to-month arrangement may be willing to pay higher rent compared to a longer-term lease. This can increase your overall rental income, particularly in high-demand areas.

Easier to Address Issues

With a month-to-month lease, landlords have the ability to address tenant issues more swiftly. If a tenant is problematic or fails to adhere to lease terms, you can terminate the lease with a relatively short notice period, typically 30 days. This makes it easier to manage and maintain a positive living environment in your rental property.

Market Adaptability

A month-to-month lease allows landlords to adapt quickly to changes in the rental market. If the market conditions change, such as a rise in demand for rental properties, you can adjust the rent accordingly. This flexibility allows you to take advantage of favorable market conditions and increase your rental income.

Property Sale or Renovation

If you plan to sell your property or make renovations, a month-to-month lease provides the flexibility needed to manage these transitions smoothly. You can give tenants notice to vacate the property, making it easier to proceed with your plans without being bound by a long-term lease agreement.

a ladder and paint supplies set up against a wall

Shorter Commitment

For landlords who prefer not to commit to a long-term lease, a month-to-month arrangement offers the advantage of shorter commitment periods. This is particularly useful if you are unsure about the long-term plans for your rental property or if you anticipate potential changes in your personal or financial situation.

Trial Period

A month-to-month lease can serve as a trial period to evaluate tenants before committing to a long-term lease. This allows you to assess whether a tenant is reliable and responsible. If the tenant proves to be a good fit, you can offer them a longer-term lease with greater confidence.

Disadvantages of a Month-to-Month Lease

Despite the numerous advantages, month-to-month leases also come with several drawbacks that landlords should consider.

Income Uncertainty

One of the main disadvantages of a month-to-month lease is the uncertainty of rental income. With the potential for tenants to leave with just 30 days’ notice, there is a higher risk of frequent vacancies. This can lead to periods without rental income, making it more challenging to predict and manage your cash flow.

Higher Turnover Costs

Frequent tenant turnover can result in higher costs for landlords. Each time a tenant moves out, you may incur expenses related to advertising the vacancy, screening new tenants, and preparing the property for new occupants. These costs can add up and reduce your overall profitability.

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Administrative Burden

Managing a month-to-month lease can be more administratively demanding. With the potential for frequent lease renewals and terminations, landlords need to stay on top of lease management, tenant communications, and property maintenance. This can be time-consuming and may require more effort compared to managing long-term leases.

Lack of Long-Term Commitment

The lack of a long-term commitment can be a disadvantage for landlords who prefer stability. With month-to-month leases, you may find it challenging to plan for the future, as you cannot rely on a consistent tenant base. This can make it difficult to make long-term decisions about your rental property.


The inherent instability of month-to-month leases can create stress for both landlords and tenants. The possibility of frequent tenant turnover and the need to constantly manage new leases can lead to a less predictable and more stressful rental experience.

Frequently Asked Questions

What is the difference between a month-to-month lease and a lease renewal?

A month-to-month lease automatically renews every 30 days, offering flexibility for both landlords and tenants. In contrast, a lease renewal typically extends an existing fixed-term lease for a set period, such as six months or a year. Lease renewals provide more stability but less flexibility compared to month-to-month leases.

Is signing a month-to-month lease mandatory?

No, signing a month-to-month lease is not mandatory. It is an option that landlords and tenants can choose based on their specific needs and circumstances. Landlords can offer either fixed-term leases or month-to-month leases, depending on what works best for their rental business.

Living room full of brown moving boxes

How does the 30-day notice period work in a month-to-month lease?

In a month-to-month lease, either the landlord or the tenant can terminate the lease with a 30-day notice. This means that the party wishing to end the lease must provide written notice at least 30 days before the desired termination date. This notice period provides a reasonable timeframe for both parties to make necessary arrangements.

Bottom Line

Deciding whether a month-to-month lease is better for landlords depends on various factors, including your need for flexibility, tolerance for potential income fluctuations, and willingness to manage higher turnover rates. 

While this type of lease offers significant advantages such as higher rent potential, market adaptability, and ease of addressing tenant issues, it also comes with drawbacks like income uncertainty, higher turnover costs, and administrative burdens.

For landlords looking to navigate the complexities of month-to-month leases, Real Property Management Talent can provide valuable assistance. Our team of professionals can help manage the administrative tasks, ensure compliance with legal requirements, and optimize your rental income. 

Whether you choose a month-to-month lease or a fixed-term lease, we can support you in making informed decisions and managing your rental property effectively.

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