Month to month v. lease and rent raise

General Landlording & Rental Properties
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Month to month v. lease and rent raise

David K.
Investor · Attleboro, MA · Member since 2016 · 137 posts · 51 votes

After meeting with my attorney the other day he suggested in new rental agreements to do a month to month basis for some very good reasons.  In the state I invest, its much easier to get rid of a problem tenant.  He also mentioned why hold someone in a home they don't want to be in, could be a problem, let em go and move on.  All new rental agreements are done this way now.

I have a good tenant who always pays whose 1 year lease is coming due.  I sent her the new month to month agreement.  She contacted me and asked for another year lease as she feels more comfortable that way.  I explained to her I wasn't planning on raising the rent every month etc., but still insists on a new lease instead.  I included a $25 month increase, (I'm still low for the market, but she's lived here for years).

Wondering if I should agree to do another 1 year, lease but a slightly higher price or just give her what she wants since she's been good for years.  Thoughts?

I have many units of property and tenant turnovers are my biggest cost, so I try and keep vacancy as low as possible.  Please only respond if you have multiple units or property, thanks guys!

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Chinmay J.
Investor · Northern, VA · Member since 2016 · 1k+ posts · 904 votes
8y
Originally posted by @David K.:

After meeting with my attorney the other day he suggested in new rental agreements to do a month to month basis for some very good reasons.  In the state I invest, its much easier to get rid of a problem tenant.  He also mentioned why hold someone in a home they don't want to be in, could be a problem, let em go and move on.  All new rental agreements are done this way now.

I have a good tenant who always pays whose 1 year lease is coming due.  I sent her the new month to month agreement.  She contacted me and asked for another year lease as she feels more comfortable that way.  I explained to her I wasn't planning on raising the rent every month etc., but still insists on a new lease instead.  I included a $25 month increase, (I'm still low for the market, but she's lived here for years).

Wondering if I should agree to do another 1 year, lease but a slightly higher price or just give her what she wants since she's been good for years.  Thoughts?

I have many units of property and tenant turnovers are my biggest cost, so I try and keep vacancy as low as possible.  Please only respond if you have multiple units or property, thanks guys!

 If someone has lived there for 'years' (as you said) its obvious that they don't want to move and consider your rental property, as their home. Your tenant is afraid that you will change your mind, one fine day, and decided that you no longer want her.   That is common tenant psyche. 

Your attorney is not qualified to speak about tenant psyche unless he is a landlord himself.  Tell him to stick to the legal part. 

If someone is long term tenant, I would be very willing to give them a year long lease. 

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  • Ray Harrell
    Investor · Chicago, IL · Member since 2016 · 1k+ posts · 930 votes
    8y

    Whose property is it? Yours or the tenants? She doesn't get to call the shots. You have already decided that you're doing M2M rental agreements. If she wants comfort of security she can go purchase a house of her own. Don't let tenants dictate the terms of their tenancy.

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  • Chinmay J.
    Investor · Northern, VA · Member since 2016 · 1k+ posts · 904 votes
    8y
    Originally posted by @David K.:

    After meeting with my attorney the other day he suggested in new rental agreements to do a month to month basis for some very good reasons.  In the state I invest, its much easier to get rid of a problem tenant.  He also mentioned why hold someone in a home they don't want to be in, could be a problem, let em go and move on.  All new rental agreements are done this way now.

    I have a good tenant who always pays whose 1 year lease is coming due.  I sent her the new month to month agreement.  She contacted me and asked for another year lease as she feels more comfortable that way.  I explained to her I wasn't planning on raising the rent every month etc., but still insists on a new lease instead.  I included a $25 month increase, (I'm still low for the market, but she's lived here for years).

    Wondering if I should agree to do another 1 year, lease but a slightly higher price or just give her what she wants since she's been good for years.  Thoughts?

    I have many units of property and tenant turnovers are my biggest cost, so I try and keep vacancy as low as possible.  Please only respond if you have multiple units or property, thanks guys!

     If someone has lived there for 'years' (as you said) its obvious that they don't want to move and consider your rental property, as their home. Your tenant is afraid that you will change your mind, one fine day, and decided that you no longer want her.   That is common tenant psyche. 

    Your attorney is not qualified to speak about tenant psyche unless he is a landlord himself.  Tell him to stick to the legal part. 

    If someone is long term tenant, I would be very willing to give them a year long lease. 

    1Reply
  • Account Closed
    Real Estate Broker · FREDERICKSBURG, VA · Member since 2018 · 30 posts · 36 votes
    8y

    I've got to agree with @Chinmay J. on your long term tenant. She is a solid tenant who always pays and is comfortable with the same one year lease format the she signed last year. Why rock the boat with her? I say offer the month-to-month lease when facing new tenants with no established history. Keep this woman happy and paying rent in your home. Avoid turnover.

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  • David K.
    OP
    Investor · Attleboro, MA · Member since 2016 · 137 posts · 51 votes
    8y

    Yep that's what I did.  Cost of turnover would be a year at least break even.  I'd rather have someone keep paying.

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  • Andrew B.
    Rockaway, NJ · Member since 2016 · 2k+ posts · 2k+ votes
    8y

    in my mind the benefits of a month to month lease are that you have more control if the tenant turns out to be a pain in the ***, and you did not catch that during the screening process. I think that benefit is mostly lost when you know the tenant is good an comfortable in your home. it is definitely your right to insist on a month to month lease, but if you are comfortable with this tenant there is no good reason to force a month to month on her, unless you forsee needing to make changes in the enar future.

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