MN - Looking at 4 plex, current owner does month to month only

[Frank Cannata]

I went and looked at a 4plex this weekend, the owner happened to be there doing some work on the property so we got to talking with him which was awesome, he has owned and managed the place himself for 13 years. 

One thing that had me confused though, he said the previous owner he bought the place from told him to only do Month-to-Month leases with tennants so that "he can avoid paying the $500 to evict them". He said he just "has to make sure he sends them a 30 day notice and he is good." He has been doing this for 13 years. Currently has one of the units rented out 4.5 years, the other unit 2.5 years, then the 2 other units have people coming in right now. 

This is in Minnesota. 

does anyone know what the benefit would be to keeping it month to month? Is he correct? or has he just been extremely lucky for 13 years? seems like everything i read says i want to get my tenants on a year lease. 

thanks in advance for the help! 

[John Woodrich]

For single family houses I ask for a year lease, for MF I put people on M2M.  Reason I put them on M2M is that it is easier to get rid of a problem tenant or a tenant who may be causing tenant/tenant drama if they are on a M2M lease.  You simply tell them you are not renewing and they have XX days to get out.  If you had a year lease and ran into issues that were outside of our lease agreement you simply couldn't kick them out.  That lease is a binding contract on both parties, they have a right to live there for a year under a annual lease.  

Your strategy may depend based on area but in my instance I don't have to worry about finding someone quickly if needed.  It isn't fun to rent places in MN during the winter however I don't have an issue in my area, this may not be the case for other areas. Also, if they want out of the lease I find it easier to let them out by having them giving me timely notice instead of leaving upset without any notice.