Lease vs Tenant at Will

7 Replies

Before I jump into becoming a landlord I would like to know a little more about the pros and cons of having tenants sign a lease versus doing a tenant at will. The reason I ask is that I keep hearing how Landlords basically have little to no rights here in Mass. when trying to deal with a problematic tenant, especially if they have written lease. I have been told that having tenants at will gives you much more control. Your feedback is much appreciated

Whether you have a lease or not, when tenants really want to move, they will. It is usually too expensive to pursue them. Just move on and re-rent the place.

Having said that, I always do a lease. It does make most of them feel like they need to stay the full year. I have much less turnover this way.

A lot of people do month-to-month rental agreements, however, and say it is the only way to go. Maybe one of them can chime in with the benefits of mtm agreements.

I typically like to start all of my new tenants off on a month to month lease  because I do feel like I have a little more control. Like Michelle said, even on a year lease, if the tenants really want to move they will and it's not much you can do. But on that year lease you are stuck with them for that year. There may be times where you don't want that tenant staying for a year. 

The reason I started doing this is because I had a tenant who purposely started paying as late as possible (the night before the sheriff showed up to evict). Because I was in a 12 month lease there was little I could do and I was forced to go thru the process every single month. Luckily in my area after the 5th  "late payment" judgement I can evict them even if they do pay and the tenant didn't know that. Worse would be if a professional tenant knew that rule and always paid right before I got the "late payment" judgement and they could technically pay rent 3 weeks late every month for the full lease and there would be absolutely NOTHING i could do. 

If they're on month to month I can let them know I'm terminating their lease, or that I'm increasing their rent as soon as I see that they're trying to "work the system". After 6mo-12mo if they're a good tenant I'll lock them into a lease.

@Chris K.  if a tenant is late once or consistently every month, either way, what's stopping you from collecting late fees which ultimately add up to additional income? I have tenants who pay late every month and the pay the extra late fee every month. If they don't pay it, next months rent is applied to last months late fee, now their rent is only partially pad and you can threaten eviction. 

Originally posted by @Dick Rosen:

@Chris K. if a tenant is late once or consistently every month, either way, what's stopping you from collecting late fees which ultimately add up to additional income? I have tenants who pay late every month and the pay the extra late fee every month. If they don't pay it, next months rent is applied to last months late fee, now their rent is only partially pad and you can threaten eviction. 

 I do collect late fees but personally I'd just rather get the payment on time. The time, energy and stress of chasing down late payments isn't worth the 5% to me. I don't want a tenant that I constantly have to threaten with eviction.

I may not care if they paid every single month on the 10th but the tenant who made me change how I do leases wouldn't pay until a few days before eviction day, which was usually 2 and a half months later, and even then she would only pay the minimum required for the sheriff not to put her out. So she was pretty much always 2 and a half months late.

Awesome feedback everyone, thank you.

I do like the idea of getting the additional income in late fees and if they are consistently late I can always enforce the right to evict if things appear to be getting worse. If they seem to be great tenants after 6 months I may just ask for the year lease. Seeing as I work a full time job I may look into using a PM as well. Does anyone know what the normal % of income is to a PM in the Boston area?

Originally posted by @Robert Kohalmi:

Awesome feedback everyone, thank you.

I do like the idea of getting the additional income in late fees and if they are consistently late I can always enforce the right to evict if things appear to be getting worse. If they seem to be great tenants after 6 months I may just ask for the year lease. Seeing as I work a full time job I may look into using a PM as well. Does anyone know what the normal % of income is to a PM in the Boston area?

Don't get too excited about the prospect of getting late fees.

In MA you can't charge a late fee until they are 30 days late, so if they haven't paid by then you should already be in the thick of the eviction process anyway. 

@Robert Kohalmi Welcome.

I like TAW because each of us has to give the other a 30 day notice for any changes.

Lease means they give me 30 days but I have to wait for the end of the lease.

We have the Housing Court Judge speak to us once a year at our regular meetings and he always admonishes me to keep all the latest documents required on our site for members.

Maybe a RE Broker could do your PM for 8-10%?

Create Lasting Wealth Through Real Estate

Join the millions of people achieving financial freedom through the power of real estate investing

Start here