Rentor wants to pay a full year, currently on month to month

[Manuel V.]

Hello Everyone,

 I am new to BP and currently trying to go through the entire podcast series. I have a single family which I'm renting out through a Month to Month agreement and have had it rented for 1 year so far. 

The renters are wanting to pay a full year rent in advance. I wanted to see if this would be a good idea or what the negative impacts could be. I am always looking at the negative implications a and protect my investment.

What would you recommend? My questions are:

1. Should I switch to a 1-year term lease?I like the month to month to prevent non payers. 

[Nicole Garner]

I'm not an attorney, don't know your state laws and do not suggest that this is legal advice.

If the tenants want to pay a full year of rent in advance, I would suggest requiring that they renew a 1 year lease before accepting payment.  This would prevent them from vacating the property prior to the end of the prepaid rent term and the tenant requesting a refund of rent they would claim would be "unused".  Again, I am not familiar with what your state laws allow; but I would not leave them on month-to-month to terms and accept rent for a full year.  It does leave you open to rent repayment liabilities. 

When in doubt, find a good real estate attorney and schedule a consultation.