When you enter into a lease on an apartment of for that matter a house, then there is a great responsibility from your side. What does it imply? Here then, you are having a legal obligation to expend some money as rent for a particular span. So by now you will realize that if you don’t pay the specific amount there are chances that you are supposed to pay a penalty. Well, here then, a one-year lease is the most usually used lease.
Now we have to look into one aspect: isn’t it an extended span as far as a year is concerned? If you keep changing your mind occasionally, i.e. you as the tenant, a month to month lease is the best one as far as flexibility is concerned.
Month-to-month lease is being discussed to a great extent and each individual possesses a specific idea about it. While some landlords prefer this type of lease some just cannot withstand it.
When it comes to flexibility a month-to-month lease offers great flexibility to both the tenant and the landlord. But one thing to be considered is that these leases also have their own shares of advantages and disadvantages as compared to any other legal agreement.
Now let’s see the pros and cons of such leases before you endeavor into signing it:
- Well, it’s the flexibility that makes the month to month lease a distinct one as from the traditional annual lease. The typical advantages that you get in a fixed term lease can be seen in this lease too. The difference may be that there may be some slight changes in the lease. One among the essential differences is that the landlord must see to it that the house is in a living condition. As in the case of month-to-month lease it sees an automatic renewal without any say from the tenant or landlord.
- Another means of flexibility with month-to-month lease is that if you are on the search of a new job this type of lease can be ideal for you. Mobility is one thing that makes this short term lease appealing. Suppose you have come to a new place and are searching for where to live, this lease offers you with the opportunity to be cognizant of the city’s nature while still residing in it. For those students who have just graduated from college a month-to-month lease can be a fruitful option.
- In case you enter into a 12 month lease you are legally bound for the annual payments for these 12 months. This is irrespective of the fact that you still say in the apartment or not. Suppose you break your lease you will not have to pay any amount in case of month-to-month lease.
- When it comes to the landlords, the month-to-month lease doesn’t seem to be a good option. They are not certain of an entire year’s rent. But again, this lease can be a good idea to the landlord if they have difficulty with cash and are struggling to scout for a tenant who stays for an extended period.
- In your role as a renter theses leases are costly. Generally, property managers ask for more money in case of such leases. While you consistently renew the month-to-month lease for a long span there arises the chance of overpaying.
- Novice landlords will be digging into your credit history and the greater frequency in which it is accessed drives to the possibility of negatively impacting your credit score. Also, this means that you are leading an unstable life.
- Every time the tenant goes out of the property the property owner has to take up the charge of advertising the apartment and make it all set for the subsequent tenant. When the landlord doesn’t have any tenant as soon as the previous one moves out there is the likelihood of monthly loss.
Generally landlords are prepared to enter into a month-to-month lease when there is great surge in the rents. These leases have their own share of advantages over fixed period leases but again it all zeroes down to your requirements. As a tenant you should also carefully consider the fact that the landlord can make you move out of the property in a very short span. There are also chances of varying in prices. So, one has to weigh the pros and cons.
Zack Childress is a real estate expert and is the owner of REI Success Academy. He provides tips to the beginner investors and also talks about the different facets of real estate.