Month to Month vs. Long Term Lease

[Sean Smith]

Hey BP

*Sacramento and Bay Area Market* 

I recently had a conversation with a buy-n-hold investor about his rental properties. To my surprise, he prefers month to month agreements over a typically stable 6 month or year lease. 

His reasoning: 

1. Sacramento (and California in general) is a very hot rental market. He has a massive waiting list for all his properties, so almost no vacancy at all. His list contains people from all over Sacramento, and even areas like San Jose, San Francisco, and Oakland.

2. If the tenant is troublesome he can serve a 30-day notice to vacate. A year lease, which is typically preferred, actually works against him in the case of bad tenants and strict Californian landlording laws.

What are your thoughts? Which do you prefer in your rentals?