Section 8 Question month to month or lease?

Question

Hi, I'm currently negotiating for my first rental property that's currently rented by section 8 on month to month basis for a couple of years. Current owner is saying by signing another year lease he can get another $100 a month from section 8 but he chooses not to because this way he can get the tenants out anytime he wants. I'm just trying to figure out what am I missing here.

Kevin Siedlecki · Answer

Mahesh G. - yeah something doesn't pass the sniff test there. I know a lot of landlords who prefer month-to-month leases for a variety of reasons, but in this case, his story and actions combine to tell us that he has no intention of getting them out, and he's passed on a couple thousand dollars of cash flow. Three potential scenarios here:

1) They aren't good tenants, and he wants them out.

2) He's lying about the $100/month bump

3) He's just too lazy or clueless to get the other lease done.

I guess 3 is the most likely, but I wouldn't work from that assumption. I would assume the $100 is either completely made up or exaggerated. Run your numbers assuming current rents.

Thomas S. · Answer

Defiantly stay M2M till you get your bearings. Why rush to tie your hands in a term lease when a M2M allows 100% flexibility. You can change one you can't change the other.

I do not see the relationship between term and M2M in regards to rental rates.