Month to month lease to counteract COVID renter delinquency risk

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Hey guys, just a quick bit of food for thought and discussion.

I understand that screening tenants is crucial nowadays but I am starting to think that going with a month to month lease agreement for new tenants will be a good way to counteract the effects of COVID. The potential of renters losing their jobs and becoming delinquent is a huge concern for me as I am reading story after horror story of squatters, etc. There is also a good chance that dealing with the courts might end up being even more of a hassle when the eviction moratoriums end with backlog, delays, etc.

Then again, on the other side of the coin, I will probably be cutting my renter pool down because of the fact that the renter would not have the security of a long term lease in these times.

I might have just answered my own questions but you guys have any thoughts?

As with all things it depends on the market you're in.  I agree that moving to a month-to-month lease would be a good way to help mitigate some of the risk until things stabilize.  I'm not sure how much it would reduce your tenant pool because there is benefit to some tenants as well to not being locked into a long-lease that they may not be able to afford if the income stops.  Just remember that you would still be reliant on a tenant following through and moving out if their lease was non-renewed in order to avoid eviction.  Just because they are on a month-to-month lease doesn't mean they couldn't stop paying and refuse to move out which would leave you in a position where you'd need to evict them. So using monthly leases is by no means bulletproof, however, it may provide you with a little more flexibility and possibly less risk depending on what you're market is like.