How do I do month-to-month from the beginning of the rental?

Question

Hello all!

I have a single-family house that I'm about to put on the market again.  Because of the current uncertainties, I think I want to rent it on a month-to-month basis.

How do I do that from the start of the occupancy?  Do I have the tenant sign a 1 or 2 month lease that says "after this lease ends, it's month-to-month"?  Or do I need a lease that says it's month-to-month from the beginning?

I feel like I want them to sign something that has the rent amount, due dates, late fees, and all the other terms and conditions in it, so they understand what they're agreeing to.  I'm just not exactly sure what that should look like.

The house is in Missouri, if that makes a difference.

(I understand the process where you have (say) a one-year lease, it ends, the tenants don't sign a new lease, and they stay there on a month-to-month basis.  I just am not sure how to do it from the beginning of the occupancy.)

Thanks!

Matt R.

Joe Splitrock · Answer

People confuse a lease and a lease term. Month-to-month tenants sign the same lease, they just don't have a committed term. For MTM lease, you just put the starting term as one month and state it goes month to month after that.

Courtney Walker · Answer

@Stephen J Davis. I think you answered your own question...tenants can leave whenever they want and you can’t stop them.  You can go after them legally if they owe you unpaid rent but how much time and money will that cost.  If they cause a lot a damage it may be worthwhile to use the tools available to try getting some of your money back.

I recently switched to month-to-month because of the flexibility it gives me.  If somehow I do a poor job screening a tenant and the business arraignment isn’t working I can give them a 30 day notice of non renewal.

Bottom line, I try to keep my properties in a nice condition at a good price point and so far I haven’t had any issues finding quality tenants.  One downside of month to month is the possible increase of tenant turnover.  But as stated before, if you have a good product at a good price that shouldn’t be a much of a problem.

Andrew B. · Answer

There is no fundamental difference between a term lease and month to month. Take your existing lease, and remove the section that states the end dates. Replace it with a section that says "this lease will continue on an automatically renewing, month to month basis."

Jim S. · Answer

Mine start out with "this is a month to month lease". And what she said, get a lease from a realtor.

Kenneth Garrett · Answer

@Matt R.

Have them sign a month to month lease agreement.  You can find them on line.  Check out your local MLS documents.  Definitely find one that is generated through your state to make sure it meets state and local requirements.

Bjorn Ahlblad · Answer

@Matt R. our lease starts off with "Month to month" or "one year" as duration.........the one year will revert to MTM at the end of a 12 month term. We very rarely offer one year lease term.

Loren Clive · Answer

Here in Hawaii, there's a box you check on the lease that says month-to-month. I would ask any realtor friends you have to provide a standard lease and look at it. Should have this provision

Matt R. · Answer

@Loren Clive @Bjorn Ahlblad @Kenneth Garrett @Jim S. @Andrew B. Thanks!  The lease I was using before just specifies a one-year term, with start and end dates; it didn't have the wording in it for month-to-month.  I'm most likely going to get a different lease for the upcoming rental, so I will make sure it has that wording available if I want to use it.

@Stephen J Davis If I rent the property on a one-year lease tomorrow, and the tenants hit me with a COVID letter the day after that, then I'm for sure out the November and December 2020 rent.  Assuming the current restrictions aren't extended, then I or my lawyer get to file in January 2021, along with all the other cases that have been building up for the past few months.  I will most likely be out the January 2021 rent, and probably the February 2021 rent as well, while I wait for the legal process to work.  So - at least 2 months, and probably 4 months, of zero income on that property.  I am advised that using a month-to-month lease will remove some of the risk of zero income.

Stephen J Davis · Answer

Question: How does a month to month lease help in these "uncertain times?" I don't get that. Now your tenant can leave at any time and you are back out hustling for a new tenant. All of my properties are still on one year leases. Single-family and apartments.

How do I do month-to-month from the beginning of the rental?

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