@Vanessa S.We always give our tenants options. They can choose to be on month to month, but at a higher rate because it leaves you as the landlord in an insecure position with tenants who would potentially move out just prior to the holidays and leave you potentially vacant for as many as 3 months (November, December and January). Personally, I would much rather have a tenant who is contractually obligated to pay me over the course of the next 12 months as opposed to one who wouldn't. The difference is typically a 10% spread between M2M versus a one year lease.
I have a tenant who chose to sign a one year lease despite the fact that they knew they wanted to purchase a property. They have about 10 months left on their lease and they're very accommodating to showings because they want me to find a new tenant and get them off the hook for the next 10 months. They are fully aware of the fact that if I cannot replace them, they are on the hook for rent.
The other bonus about being on a 12 month lease is that my tenants beg for new leases and know that their rent will be increased by about 2-5% because that's what we do every year. I think what is most important is that you are consistent. There is nothing like being able to provide consistency/predictability in your business. I think it makes for a smooth working relationship and allows you to reference your rules/systems/laws and then show restraint. Your tenant will become your ally as opposed to your enemy and it's always nice to have cooperative tenants.
The final bonus is that when your tenant chooses and then they're upset about their choice in 3 months, you get to say "it was your choice" as opposed to taking the position of "it's my way or the highway". Letting tenants know that they made the bed that they're laying in oftentimes ends that part of the conversation very quickly.