I read a book recently (forgot which book) which talked about the idea of not putting a specified length of time, IE renting on a month-to-month basis. The premis was that he would rather have tenants who wanted to be there, and would himself be able to terminate a contract by giving the tenant 30 days notice.

On the negative side, you could potentially lose $ for people who terminate early and have to pay an early temination fee or people may decide to just use your rental house to jump in for a couple months and then quickly move out.

On the positive side, I think people being lazy is on your side on this one. If people aren't concerned with when their lease is coming up, they may not reevaluate living there and just stick around until they actually take to the time to find somewhere else to live. If you need to evict them, you can just give them 30 days notice and find a better tentant rather than have to go through the process of eviction.

So would the no contract idea be a valid one? If not, why not?

I suspect it may be more difficult than giving them 30 days notice before they have to move out.