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Updated over 5 years ago,

User Stats

814
Posts
466
Votes
Josue Vargas
  • Real Estate Agent
  • San Antonio, TX
466
Votes |
814
Posts

1 year lease + month-to-month vs. 6-month lease? Plus and Cons?

Josue Vargas
  • Real Estate Agent
  • San Antonio, TX
Posted

What are the PROS and CONS of doing a rental lease for one year plus month-to-month after the expiration main term vs a 6 month lease plus month-to-month?

This is what I think and my experience, but looking for opinion and other things that I may not know. 

I'm only numbering the pros and cons of the 6-month terms because the 1-year term will likely be the opposite of the 6-month term. 

6-month leases:

Cons: (1) more turnover, may loose a good tenant if he/she is not committed for the full year, (2) costs associated in preparing property  - repairs needed for new lease, (3) PM will charge more when there is turnover, (4) potentially more vacancy, all costs paid by me during this time, (5) Advertising costs

Pros: (1) Can avoid to renew lease to non-desirable tenants faster, (2) Can potentially save $ on eviction vs. waiting on lease to expire, (3) Can increase rent more quickly, (4) Prospect tenants are interested to have more flexibility, and they will likely go for my 6-month lease vs the competition 1-year lease.  

I have also thought of renewing the lease after the 6-month or 1-year to full term again, avoiding month-to-month, but I really like the flexibility I have with the month-to-month.  

Thank you!

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