Looking for flexibility when renting? A month-to-month lease can provide you with that freedom. This type of lease allows you to rent a property on a per month basis and cancel the lease at any time. There’s no loss of deposit and there are no penalties for canceling as long as you give 30 days advance notice.
Before you sign a new lease agreement, learn the pros and cons of month-to-month leases to determine if this flexible option is right for you.
Your guide to month-to-month leases
- What is a month-to-month lease?
- How to find a month-to-month lease
- Pros of month-to-month leases
- Cons of month-to-month leases
- Deciding if month-to-month is right for you
What is a month-to-month lease?
A month-to-month lease is a rental contract between a landlord and his/her tenant which states that the tenant can live at the property and pay rent on a month-by-month basis. This type of lease may be terminated by either party after giving 30 days advance notice.
Pros of a month-to-month lease
Flexibility
One of the main advantages of having a month-to-month lease is flexibility. It means that the lease keeps rolling over each month and you can, in theory, stay at the property indefinitely.
No penalties
If your work situation is up in the air or you’re thinking of moving neighborhoods soon, there are financial benefits to not being locked in a 6-month or 12-month lease. With a fixed-term lease, you may lose your security deposit or be forced to pay a penalty if you decide to move out before your lease is up. With a month-to-month lease, you’ll be free to move out within 30 days.
Cons of a month-to-month lease
Lease terms are subject to change more frequently
More flexibility is great, but it also means your landlord can make big changes with just a 30-day notice. Landlords are legally allowed to increase the rent more frequently, change rental terms, or evict you with 30-days’ notice. In a hot rental market, finding a new place to live may take a while. It’s always best to have a backup plan if you’re renting on a month-to-month lease, as things can change rather quickly.
Month-to-month leases are often more expensive
Month-to-month leases will generally be more expensive than a typical 12-month lease. This is largely in part because the landlord is taking a larger risk that the unit will be vacant more frequently. More frequent vacancies also means additional costs to list the property and perform necessary repairs and maintenance, plus additional time to show the unit on a more frequent basis.
How can I find a month-to-month lease?
Landlords who want more security are usually reluctant to agree to a month-to-month lease. Sometimes, a landlord will have you start by signing a fixed-term lease for 3 months or 6 months lease to prove your credibility as a renter. When your fixed-term lease ends, ask your landlord to consider a month-to-month lease, especially if you’ve been a good renter and have always paid your rent on time.
However, it’s ultimately your landlord’s choice. If the lack of stability makes them uncomfortable and they decide they want you to sign a fixed-lease instead, that’s completely legal. If you don’t want to renew with a fixed-term lease, you’ll have to move out once your current lease ends.
Is a month-to-month lease agreements right for you?
Ultimately, you’ll have to weigh the pros and cons to make the decision that works best for you. Month-to-month leases provide a flexible rental arrangement, but you may end up paying a higher price each month for that flexibility. There’s also a risk of being asked to move out before you’re ready and for the terms of your lease to be changed.
If you’re after stability, consider a 6-month or 12-month lease instead. The rental price on a fixed-term lease will be locked in until the end of the rental period, so you don’t have to worry about it changing during your tenancy.
If you’re going to sign a fixed-term lease with the idea of going month-to-month down the road, check to see if it has a Holding Over clause with any special conditions. Landlords can customize this clause, so you’ll want to know what it says about staying past your lease end date.
Keep these things in mind when searching for your next apartment, and be prepared for the pros and cons if you choose to rent on a month-to-month lease.
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