How to calculate rent increase for Month-Month vs Yearly Lease

[Kurt K.]

Hello all.  My tenant in my only rental property might be moving out, but has asked if we would consider a month to month.  We said yes.  I just need to know what is a way to calculate a fair rent for a month to month vs a the current amount we charge in our year lease.  I searched google and could find a good answer.  This house is in Henderson, Nevada.  Their first year, 2016-2017, the rent was $1600, second year we increased it to $1650.  They have been great tenants and we want to accommodate them while they search for a house to buy, etc.

Thanks for any feedback! 

[Michael Guzik]

@Kurt K. That's a great question and is a very tricky one. This really depends on you and your preferences and risk tolerances. I can't speak for everyone but I can speak from my management experience. With our plex's we charge 12% more than the standard rent for month to month leases. For a typical 6 month 2/1 we charge 850 for a 6 month lease and month to month is 952. You have to remember this is a greater risk for you, because as people have said they can leave you high and dry during a bad time of the year. So I personally believe people should pay more if they aren't willing to commit to a longer term. That's just my 2 cents though. Do what you think is right and will benefit you most. Good luck!