One year lease to month to month

[Wally Burbage]

We own apartments and have always done a one year lease that converts to a month to month at the end of the term. Pros and cons of doing so?

[Stacy Hopkins]

I build into my 12 month lease a small bump up if they want to go month-month after it expires.  That's should cover for 2 years.   If you're in a very hot rental market, you can just re-do a different 12  after a notice.  I try to be strategic with new 12 month leases and schedule them in the winter.   No one wants to move in the winter.  My tenants always expect some small bump every year.  If you go mutliple years without raising rates,  the tenant will become complacent and be shocked by your sudden attempt to get back to market rates.  For good tenants,  I keep the rates just slightly below market and they'll stay unless of job transfer.