Benefits of Month-to-Month Rental Agreements
Benefits of Month-to-Month Rental Agreements #1: More Attractive to Tenants
Many tenants, including travelers, college kids, new divorc�©es and others, do not want to commit to a fixed-period lease, and would instead prefer a month-to-month rental agreement. You will probably attract far more tenants with this type of lease, even though they might stay for much shorter periods.
This is also true for low-income families who might have difficulty finding housing with a fixed-period lease. They can have a place to live without the commitment of staying for any longer than a couple of months.
Benefits of Month-to-Month Rental Agreements #2: Problem Tenants are Removed Easier
With a fixed-period lease, it is more difficult to identify tenants who create problems and destruction, and to get them off your property. With a month-to-month rental agreement, you can make adjustments as you see fit, and can cancel the agreement within 30 days.
You’ll also be able to minimize the amount of damage caused by tenants. They won’t have as long a time to wreck your property, which is the bane of most landlords’ existences.
Benefits of Month-to-Month Rental Agreements #3: More Frequent Rent Raises
If a tenant signs a 12-month lease, you are not able to raise the rent for at least twelve months. On a month-to-month rental agreement, however, you can raise the rent as often as you wish, and in smaller increments to avoid chasing tenants away.
You can also charge more rent to start with because tenants are paying for the month-to-month freedom, and are free to move whenever they wish. Although I wouldn’t recommend putting your rates too much higher than your fixed-period competitors, you can raise the rent nominally and garner more profit.
Benefits of Month-to-Month Rental Agreements #4: Location
If your rental property is in a college town, a popular vacation spot, or another desirable location for frequent travelers, you’ll stand a better chance of succeeding financially with a month-to-month rental agreement. You’ll have a much higher turn-over rate, but you’ll get more tenants and you’ll be able to charge higher rates.
Although a month-to-month rental agreement does present certain security problems for the landlord, it is a perfectly acceptable way to do business, and can be customized to fit your rental property. You can maximize the benefits by offering both fixed-period leases and month-to-month rental agreements
