Month-to-Month Leases: The Pros and Cons

How to choose the right lease duration for your rental property.

A young woman with short, curly black hair sits cross-legged on a wooden floor. She is holding a light blue mug filled with packing peanuts, and is surrounded by stacks of moving boxes.

Landlords are faced with a multitude of important decisions when renting their properties, including figuring out the duration of the lease. Although just about every landlord big or small would prefer having stable long-term tenants, there are times when a month-to-month lease may actually be a better option than a yearly lease.

Month-to-month leases are flexible rental agreements that last for 30 days at a time. These leases automatically renew each month unless either party provides written notice to terminate beforehand. Similar to longer leases, they include the same clauses for amount of rent, security deposit requirements, and any penalties for breaking the lease. Most states require at least 30 days' notice to vacate, however, this varies by location. Month-to-month leases are excellent for providing adaptability for both landlords and tenants, but it is important to weigh the advantages and disadvantages to determine if they are the right fit for you, your tenants, and your property.

Please be aware that the following is for informational purposes only and is not intended as legal advice.

Pros of a Month-to-Month Lease

Flexibility and Control

The biggest perk of month-to-month leases is their flexibility for both landlords and tenants. Compared to 6-month or annual leases, monthly leases offer the freedom to adjust the agreement as needed. Landlords can keep their policies current with local laws by easily removing outdated terms or adding new ones. Additionally, rent increases (within local rent control limitations) can be implemented without waiting for a year-long lease to expire.

Month-to-month leases help you avoid being locked into a long-term agreement with a tenant who might not be a good fit. If unforeseen circumstances or difficulties arise, you have the option to not renew the lease at the end of the month. Similarly, for tenants facing uncertainty in life like family illness or a career transition, month-to-month leases act as a trial period. These shorter leases allow tenants to test the waters without making a long-term commitment. If everything clicks and they decide to stay, the agreement can easily transition to a standard yearly lease. This flexibility benefits both parties by providing a chance to assess compatibility before committing to a longer-term legal agreement.

Monthly Premiums

Increased flexibility for tenants unfortunately also means a greater risk of temporary vacancies. Due to this, some landlords choose to charge higher rent for short-term rentals to cover the costs of advertising, cleaning, and preparing the home for a new tenant. Check with a lawyer in your area to find out if this is a legal option for you.

Fewer Complications

One significant advantage of month-to-month leases is the simplified eviction process for non-paying tenants. Or rather, the lack of needing to process an eviction in the first place. Unlike year-long leases, you need not worry about breaking the lease agreement, hiring an eviction lawyer, or waiting periods for "pay-or-quit" notices. Assuming your area doesn't have "just cause" requirements for short leases, you can simply decline to renew the lease at the end of the month with proper notice. This can greatly expedite the eviction process in situations of rent delinquency or lease violations. Remember, staying informed about local eviction laws is of utmost importance.

Cons of a Month-to-Month Lease


A yearly lease gives you the peace of mind of knowing you won't have a vacancy to worry about for at least a year. Unfortunately, with a month-to-month lease, you are afforded no such certainty, and may indeed need to begin the search for a new tenant once more. While it's true that a month-to-month tenant could end up as your newest long-term renter, they could also be gone in a month or two.

A 30-day window to find a new tenant might leave you with unexpected vacancies for longer than intended, impacting your rental income. The tight time frame can also create pressure to find a new tenant quickly, leading you to rush the tenant screening process. However, a well-qualified tenant is worth the extra time investment. Thorough tenant screening is essential to securing reliable tenants who pay rent on time.

Anxiety and Uncertainty

If the prospect of frequent vacancies gives you anxiety, month-to-month leases might not be the best fit. The inherent uncertainty of not knowing how long a tenant will stay can be a source of worry. For landlords who prefer the stability of long-term occupancy, a traditional lease with a fixed term may provide greater peace of mind.

Stable Renters

While month-to-month leases offer flexibility, they might not be as attractive to long-term renters seeking stability. Responsible tenants often value predictability and may be hesitant about a lease that can be terminated with short notice. This could make it more challenging to attract and retain high-quality tenants, potentially requiring incentives to offset the lack of long-term security.

Month-to-Month leases offer flexibility for both landlords and tenants. In states with stricter eviction laws this can be a the best option, as it allows you to address problematic tenants more quickly and save money on the eviction process. However, the short notice period can make filling vacancies a challenge.

Annual leases, on the other hand, provide stability and steady rental income. This is particularly helpful in areas with high tenant turnover, like college towns or military communities. On the other hand, you're locked into a longer agreement with a tenant who might break the lease anyway.

The Bottom Line: Consider your priorities. If flexibility and the ability to move through the eviction process quickly are more important to you, a month-to-month lease might be ideal. However, if predictable income and long-term tenants are a priority, an annual lease could be a better fit. Ultimately, the best choice depends on your specific needs and local rental market.

Created on: 05/13/24

Author: CreditLink Secure Blog Team

Tags: leasing, lease , rental agreement , month-to-month , annual , yearly , eviction , rent,

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