Month to month rent only?

Question

I was talking to a friend who has several dozen rental houses in the Milwaukee area and he said that he only does month to month leases on them.  They are all in B &C neighborhoods.  He takes great pride in his properties and treats his tenants very well, but his theory is that if a tenant wants to leave, they're going to no matter what.  With month to month, he's never going to be against thousands of $$s in litigation and months of vacancy during the process.  Aside from potentially more turnover, what are the downsides of this?

Wesley W. · Answer

I only do M2M leases.  If I want the tenant out for reasons other than non-payment, I can just terminate the lease.  I agree with the OP's friend as to the other benefits.

A problem sometimes with evicting for non-payment, is that they can show up to court and cure on the day of the hearing.  After you've paid your attorney, process server, and court costs, of course.  Now you have to bring a separate action to collect those fees.  Have this happen more than once with the same tenant and you will be wishing you had them on a M2M.

No down side to M2M that I can see other than potentially high turnover if you don't screen out people that are seeking out a short lease for their own reasons (buying a house in 3 months, job is transferring in the spring, etc.).

Despite that, I see the advantages still outweighing the drawbacks.  Find good people and take care of them and they will never leave.

Thomas S. · Answer

The term of a lease has no direct bering on how long a tenant will stay. their life dictates when they will move and generally speaking most people do not like to move often. Term or M2M they move when they move. Some suggest M2M results in tenants moving out at a bad time of year, again tenants do not like to move at those times either as it is difficult to find available places to choose from.

M2M has all the upsides for landlords and no down side for good tenants.

Val J. · Answer

I have a tenant who is on a 1 yr lease. I've informed the tenant that when it's up in October, I will only be offering a month to month lease. I sent a certified letter but, so far no response. I'm trying this on for size so I have no real info. to add other than I think your friend has merit in his theory. If they are leaving , lease or no lease, there's nothing you can do about it. I'm thinking that if If things don't work out you & the tenant can kiss (not really) and say goodbye within 30 days and not have to wait months to do so..

Rob Myers · Answer

The downside that I am always concerned about is having a vacancy over the winter months. People move, but are less likely to move Jan-Mar in our market.  I always try to have my lease dates end in summer - there's a bigger pool of tenants to pull from.

M.C. Nachtigal · Answer

Nope, not in Seattle.  It's caused the Just Cause Eviction Ordinance, and specifies a specific list of reasons that a landlord can evict someone from a month to month lease.   Now, a one month lease is a different thing, but they you'd have to have the tenant re-sign every single month, or else it turns into a month to month if you continue to accept their rent.

https://www.seattle.gov/dpd/cs/groups/pan/@pan/documents/web_informational/dpdd016420.pdf

Thomas S. · Answer

@M.C. Nachtigal

"In Seattle I will never consider M2M"

A M2M expires at the end of every month. It is automatically renewed unless either side gives notice to terminate. The landlord can non renew any month you choose.

Ned J. · Answer

A good lawyer friend who does over 1000 evictions a year recommended I do M2M...... so I took his advice.

In my mind a lease protects the tenant....a M2M protects the landlord. Lets face it, if the tenant actually breaks the lease, you may win the case, but you will never see the $$ in 99% of the cases.

If my tenant sucks, I give notice and out they go....if I have a lease I cant really do anything until they break it....

M.C. Nachtigal · Answer

In Seattle I will never consider M2M as the law states I can only evict for a short list of reasons including my family moving in, illegal activity, nonpayment of rent, etc.  But not because they are a PITA or something like that.  With a term lease in which the lease expires at the end of the term, at least I know I can decline to renew the lease.

Month to month rent only?

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