Month-to-month leases: the pros and cons
Did you know that “Should I buy a puppy?” was the most searched Pros and Cons list last year? Pros and cons are the best way to justify a decision you have already made. Take the puppy for example. Pro: unconditional love and kisses from the cutest fluffball you could ever imagine. Con: it might devour one of your socks while gazing up at you with bulging brown eyes begging for your forgiveness. See? Decision already made. But what does this have to do with monthly leases?
The Pros and Cons of monthly leases
There are a few reasons why you may need the option to move on at any minute’s notice. Apart from you being a spy, the most likely is that you need somewhere to stay in the short-term. For instance, following the sale of your previous property or if you are new to the town or city. Month-to-month leases allow you to get a feel for your home as well as your neighbours, the neighbourhood in general, and your landlord. Your job situation will also dictate whether you may prefer a month-by-month arrangement.
2. No charges.
As part of this flexible arrangement, you are immune from any charges when you move on. You do still need to provide your landlord with a letter stating your intent to finish your lease. This must be 28 days from the date that the landlord receives the letter. Compared to breaking a fixed-term lease, this won’t break the bank.
As long as your landlord is open to it, month-to-month leases can become fixed-term leases. The most common of these are leases of six or twelve months.
So all in all, the ‘pros’ of month-to-month leases come under the one umbrella pro: flexibility. With changes to the market and different job types this may be the option for you. More often than not however a month-to-month lease is more beneficial to the landlord than the tenant.
1. More expensive.
As a nod to the above comment, landlords often increase their rent in two ways.
i. Higher rental costs compared to comparative long-term leases in the area.
ii. The fact that the landlord may try to increase rent while you are in the property.
Few tenants are aware that a landlord can only increase rent once in a six-month period. This goes for month-to-month lease arrangements as well. If you have a clause in your agreement stating the landlord is free to increase rent more than once in six months, you should seek professional advice from a tenants’ union.
This is flexibility’s alter ego. Just as you are flexible in a month-to-month lease, the landlord is free to end the lease arrangement with fourteen days notice from the end of the lease term.
3. Harder to find.
Landlords often want a long-term lease because of the instability of this arrangement. They don’t want to worry about marketing and the headache of finding new tenants for their property. It is often much easier to find fixed-term lease arrangements.
However, there are often instance of a long term lease, becoming month to month after the lease is complete if the property manager or landlord has not sent out a renewal. This situation requires a whole new set of pros and cons!
4. Sending a message.
Future landlords may see your rental history and judge you as being an unstable tenant.