Pros and Cons of a Month-to-Month Rental Agreement

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What Are the Pros and Cons of a Month-to-Month Rental Agreement?

Pros and Cons of a Month-to-Month Rental Agreement

Month-to-month agreements, used to occupy rental apartments, can work well for some and become a nightmare for others. As with most fairly negotiated agreements, the success or failure of the arrangement often directly relates to the wishes of the parties. Month-to-month residential lease agreements are a perfect example of this proven theory.

First, both parties should understand the basics of month-to-month arrangements as they apply to rental apartments. Most of these agreements stipulate that the tenant agrees to occupy and the landlord agrees to allow the rental property to be occupied by the tenant for a term of one month at a time, possibly with no future stipulated end of term. Hence, the term may last as short as 30 days or may continue, technically, forever -- as long as both tenant and landlord are happy with the arrangement.

From a landlord's perspective, this arrangement allows quick reaction to market changes (increasing rents, taxes, the need to sell the rental property, etc.) that help protect against economic downturns. The tenants enjoys the same flexibility should he want it. Since he is not committed to long term residency, should the rent increase, he secures a fabulous new job offer in another state or another housing opportunity presents itself, he has the freedom to move and improve his quality of life quickly.

Unfortunately, every coin has two sides. Landlords enjoy little security that their current tenants will remain over the long term. As experienced landlords are well aware, a vacancy and the related costs to find a new tenant can make a serious dent in one's bank account. Tenants are also often afflicted by this lack of security. Moving from one rental property to another is not usually classified as an enjoyable activity. An agreement that allows a short 30-day notice of termination does not provide a very effective time frame to look for, rent, and move to a new home.

The flexibility offered by a month-to-month term for rental apartments, however, often works well for both landlord and tenant. The downside risks to one, the other, or both are, however, potentially a problem. Month-to-month residential lease agreements are still widely used but should be carefully considered by both parties before a contract is executed.

The above-listed tip is for informational use only. Always read entire specific documents and language before executing any contract or agreement.

   

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