Require a new lease?

Question

My rental house in Seattle is once again up for either having the tenants renew for another year, or allowing them to transition to month-to-month. In the past, I've requested a new lease so I don't wonder each month if they might give notice & move. 
          
          However, the management company charges a 1/2-month new-lease fee even when existing tenants sign a new lease. Seems outrageous but I haven't found a better company (yet?).
          
          What are the pros & cons?

Jeff B. · Answer

A 1 year lease doesn't mean it stays rented for the year.  Any tenant can give you 30 days notice, vacate in good standing and is only obligated to pay for the time between they moved out until the landlord finds a new tenant.

That being said you see the security you have with a 1 year lease vs. month to month.  A month to month could move out in November and you would probably have a hard time renting the unit again until after Jan 1st.

The property manager deserves the 1/2 month rent if they continue to provide their services.  I ask mine to provide inspection pictures of my properties at least once a year and make sure they are looking out for my best interests.  If they are reluctant to provide inspections picks I know they have little interest in anything but the money.

The thing all rental owners are trying to avoid are deadbeats, vacancies, and destructive tenants.  If you have good tenants who pay and aren't destroying the unit then you are ahead of the game.

K S. · Answer

One obvious benefit of requiring a new lease from my renters is that I know the property stays rented for that entire year.

Are there any benefits to letting them go month-to-month? In this economy, I'm not planning to raise rent.

Thanks!

Account Closed · Answer

I have a number of rental properties in the Seattle area as well.  I manage my own properties at this time though.

I have had several tenants that I allowed to go to month-to-month rather than sign a new lease at the end of the lease.  There are advantages to have tenants on a month-to-month.  Most have continued to rent for many years afterward.  I also get some that ask for a renewal lease which I do for them.