What do you prefer? Month to Month or yearly leases?

Question

Dawn Anastasi · Answer

Yes, it's always positive or no reaction. I've never gotten a negative reaction. I have never extended it to a year lease for anyone. It's always month to month.

James R. · Answer

@Todd FithianThat sounds good, but when push comes to shove and a tenant has to move before 6 months is up, I don't think that demand would hold up in court. Maybe in CA, but in WI, I know landlords try to hold tenants accountable for everything under the sun to protect themselves from any accountability and they lose in court.

For example, let's say your tenant found a new job somewhere else and moved after one month. You keep their deposit. He/she has the smarts to sue you. You lose my friend. 1) The deposit can only be used for damages to the apt. at move out. 2) You as the landlord have to mitigate your losses and if the tenant gave you a 1 month notice that he/she was moving, you have 1 month to find and new tenant. He/she cleans the apt. and you owe them their deposit in 21 days or less. Keep their deposit and in court you will be sued for triple the security deposit. A smart tenant would cash in on that. You either have a month-to-month lease or a 6 month rental agreement. Not a little of both.

Jeff B. · Answer

OUCH! Just love governmental overreach.

Dawn Anastasi · Answer

I prefer month to month. I try to get long term tenants and since I mostly do single family homes, most tenants are long-term.

Sean Tracey · Answer

Hi Dawn, do you get a generally positive/neutral reaction from potential renters when you initially let them know it's month to month? As someone who rents, I'd feel pretty insecure, so I'm interested to know if I'm unique in that sense. Also, do you ever extend the lease terms beyond one month for good tenants?

James R. · Answer

@Todd Fithian

Glad to help! Better to find out here than in court!

Best wishes!

BTW an 'early termination fee' would be the terminology, but in WI it is only applicable to a one year lease.

Todd F. · Answer

@James R.See and this is exactly the reason that Bigger pockets is so valuable. I must admit, you are completely correct. I figured there might be some small minimal "possible" reprocussions if a landlord used my deposit holding method, but never did I think it'd be that serious. Thanks for your response, it made me stop and do my research only to find out that it could potentially get me into some trouble. I appreciate it! Good thing I hadn't had to use that on a tenant yet haha

Russell Brazil · Answer

To be honest...it doesnt really matter. If a tenant is going to move out mid lease...do you really think that piece of paper is going to hold them there? Sure you might have legal recourse...but do you think a person who would break a lease is the kind of person who cares that you would send them to a collection agency?

In my local market, I have to by law offer a 2 year lease anyways...so for me it is a moot point.

Jeff B. · Answer

I waffled on that for a while and went with a 3 month, auto renew m/m - - here's why:

• m/m is almost Motel 6, easily becomes constant relocations and imo sends the signal, this is a safe house until your life gets better. As I'm an absentee landlord, I don't need the extra work and it just adds to the wear/tear.
• yearly lease sounds great and landlords feel secure with it. IMO, it's in the favor of the tenants - - they have rights clear to the end of the term, even though not having paid more than one or two months rent.
• going somewhere between (#1 & #2), brings families that want to stay and yet if they can't play nice with others, I can use the 30-day notice of non-renewal and avoid the eviction (unlawful detainer) action.

In 18 yrs, I've only had to formally evict twice.

What do you prefer? Month to Month or yearly leases?

What do you prefer? Month to Month or yearly leases?

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