All
Members
Companies
Blog
Forums
Podcast
Webinars
    User Log in  /  Sign up
  • Forums
    Newest Posts Trending Discussions Followed Forums Real Estate News & Current Events General Landlording & Rental Properties Buying & Selling Real Estate Deal Analysis See All
  • Education

    Read

    BiggerPockets Blog BPInsights: Expert Analysis Guides Glossary Reviews Member Blogs

    Watch

    Webinars Video Library Financial Independence Blueprint Intro to Real Estate: Rentals

    Listen

    BiggerPockets Real Estate Podcast BiggerPockets Money Podcast BiggerPockets Business Podcast Real Estate Rookie Podcast Daily Podcast (Audio Blog)

    Topics

    Business Operations Finance Finding Deals Property Management Property Types Strategy
  • Network

    Recommended Vendors

    Real Estate Agents Mortgage Lenders Hard Money Lenders Insurance Contractors Investment Companies Build Your Team

    Search

    Members Events Jobs
  • Tools

    Calculators

    Rental Property Fix and Flip BRRRR Rehab Estimator
    Wholesaling Mortgage Payment 70% Rule Airbnb

    Services

    BPInsights: Property Insights Tenant Screening Property Management Lease Agreement Packages

    New Feature

    BPInsights (beta)

    Quickly analyze a property address or ZIP Code to compare your rent in your neighborhood.

    Analyze a property
  • Find Deals
    Real Estate Listings Find Foreclosures External Link Ads, Jobs, and Other
  • Bookstore

    Real Estate Books

    Profit Like The Pros Bidding to Buy See all books

    Featured Book

    BiggerPockets Wealth Magazine book cover
    BiggerPockets Wealth Magazine

    Written by financial journalists and data scientists, get 60+ pages of newsworthy content, expert-driven advice, and data-backed research written in a clear way to help you navigate your tough investment decisions in an ever-changing financial climate! Subscribe today and get the Oct/Nov issue delivered to your door!

    Get the Magazine
  • Pricing
Log In Sign up
User
Quick search links
Podcast Hard Money Lenders Books Washington
ForumsArrowGeneral Landlording & Rental PropertiesArrowHow to calculate rent increase for Month-Month vs Yearly Lease
  • Newest Posts
    • Newest Posts
    • Unanswered Discussions
  • Trending
    • Top Discussions
    • Trending Discussions
  • Browse Forums
Search Nova
Create post

How to calculate rent increase for Month-Month vs Yearly Lease

8 Replies

  • Share on Facebook
  • Share on Twitter
  • Share on LinkedIn
Rotate Log in or sign up to reply
user profile avatar
  • Posts 17
  • Votes 6

Kurt K.
from Laguna Hills, California

posted about 3 years ago

Hello all.  My tenant in my only rental property might be moving out, but has asked if we would consider a month to month.  We said yes.  I just need to know what is a way to calculate a fair rent for a month to month vs a the current amount we charge in our year lease.  I searched google and could find a good answer.  This house is in Henderson, Nevada.  Their first year, 2016-2017, the rent was $1600, second year we increased it to $1650.  They have been great tenants and we want to accommodate them while they search for a house to buy, etc.

Thanks for any feedback! 

Rotate Log in or sign up to reply
user profile avatar
  • Posts 14K
  • Votes 13K

Thomas S.

replied about 3 years ago

The majority of state landlord tenant regulations see a term lease automatically become M2M at the end of term. Rarely is the rental rate changed due to this conversion aside from the normal yearly increase.

Many landlords may choose to charge a higher rate to dissuade tenants from M2M leases, I prefer M2M and use nothing else. I charge the standard market rates regardless. If you feel you can squeeze more money out of a tenant then someone will most likely give advice however it is really up to you to questimate how much the tenant is willing to pay. On the other hand he could have simply sign a term lease and done as most tennats do by breaking their lease when it is time for them to go. 

Rotate Log in or sign up to reply
user profile avatar
Check Rosette Top Subject:
Maintenance
  • Posts 5.4K
  • Votes 2.5K

Colleen F.
Investor from Narragansett, Rhode Island

replied about 3 years ago
The most important piece is including he notice period for termination and a penalty for not honoring the notice period. Another thing you might consider is do you have a time frame that is harder to fill such as the december january timeframe. Do you want more notice then? You could put an increase for M2M but I would make it more of a slight convenience fee that isnt too much since they could have just agreed to one year and then broke the lease.
Rotate Log in or sign up to reply
user profile avatar
  • Posts 1.8K
  • Votes 460

Phillip Dwyer
from Henderson, NV

replied about 3 years ago

Keep in mind you'll need to give 45 day notice to increase rent.  Like others have mentioned, a vacancy during November and December would not be beneficial.  I'd let the current tenants know that you're willing to cooperate, but that you'll either need them to commit to a longer term before mid summer, or they'll need to vacate.  

Since rents have continued to increase, you shouldn't have a problem increasing to market in this situation.

Rotate Log in or sign up to reply
user profile avatar
  • Posts 17
  • Votes 6

Kurt K.
from Laguna Hills, California

replied about 3 years ago
Originally posted by @Phillip Dwyer :

Keep in mind you'll need to give 45 day notice to increase rent.  Like others have mentioned, a vacancy during November and December would not be beneficial.  I'd let the current tenants know that you're willing to cooperate, but that you'll either need them to commit to a longer term before mid summer, or they'll need to vacate.  

Since rents have continued to increase, you shouldn't have a problem increasing to market in this situation.

Thanks for the input.  But, where is the requirement for 45 days?  Nevada law was 30 days AFAIK.

Rotate Log in or sign up to reply
user profile avatar
  • Posts 1.8K
  • Votes 460

Phillip Dwyer
from Henderson, NV

replied about 3 years ago

@Kurt K. :

NRS 118A.300Advance notice of increase of rent.The landlord may not increase the rent payable by a tenant unless it serves the tenant with a written notice, 45 days or, in the case of any periodic tenancy of less than 1 month, 15 days in advance of the first rental payment to be increased, advising the tenant of the increase.

Rotate Log in or sign up to reply
user profile avatar
  • Posts 17
  • Votes 6

Kurt K.
from Laguna Hills, California

replied about 3 years ago
Originally posted by @Phillip Dwyer :

@Kurt Keyes:

NRS 118A.300Advance notice of increase of rent.The landlord may not increase the rent payable by a tenant unless it serves the tenant with a written notice, 45 days or, in the case of any periodic tenancy of less than 1 month, 15 days in advance of the first rental payment to be increased, advising the tenant of the increase.

Thanks for the clarification Phillip!

Rotate Log in or sign up to reply
user profile avatar
  • Posts 487
  • Votes 327

Michael Guzik
Real Estate Agent from San Antonio, TX

replied about 3 years ago

@Kurt K. That's a great question and is a very tricky one. This really depends on you and your preferences and risk tolerances. I can't speak for everyone but I can speak from my management experience. With our plex's we charge 12% more than the standard rent for month to month leases. For a typical 6 month 2/1 we charge 850 for a 6 month lease and month to month is 952. You have to remember this is a greater risk for you, because as people have said they can leave you high and dry during a bad time of the year. So I personally believe people should pay more if they aren't willing to commit to a longer term. That's just my 2 cents though. Do what you think is right and will benefit you most. Good luck!

Rotate Log in or sign up to reply
user profile avatar
  • Posts 17
  • Votes 6

Kurt K.
from Laguna Hills, California

replied about 3 years ago
Originally posted by @Michael Guzik :

@Kurt Keyes That's a great question and is a very tricky one. This really depends on you and your preferences and risk tolerances. I can't speak for everyone but I can speak from my management experience. With our plex's we charge 12% more than the standard rent for month to month leases. For a typical 6 month 2/1 we charge 850 for a 6 month lease and month to month is 952. You have to remember this is a greater risk for you, because as people have said they can leave you high and dry during a bad time of the year. So I personally believe people should pay more if they aren't willing to commit to a longer term. That's just my 2 cents though. Do what you think is right and will benefit you most. Good luck!

 Excellent info Michael.  Much appreciated to all of you.

Rotate Log in or sign up to reply
  • 1
Related Resources General Landlording & Rental Properties
6 Tech Tools That Make a Landlord’s Life Easier
Turtle Soup in the Kitchen Sink — Or, Why You Shouldn’t Skip Yearly Rental Inspections
What Is Rent Control—And Is It Bad for Landlords? (Updated 2021)
How to Choose a Management Company for Multifamily Properties
Trouble Collecting Rent on Time? Try Flexible Rent Payments
Resources Read, see, and learn more!
Link Real Estate Investment Calculators
Link BiggerPockets Blog
Link Path to Purchase
Link Mortgage Loans
Link Find a Contractor
Link Real Estate Agents
Link Hard Money Lenders
Link Real Estate Listings

Top Contributors

Bjorn Ahlblad
Bjorn Ahlblad
Shelton, WA
1.82
Score
Joe Splitrock
Joe Splitrock
Sioux Falls, SD
1.69
Score
Aj Parikh
Aj Parikh
Centreville, VA
1.34
Score
Carl Mathis
Carl Mathis
1.21
Score
JD Martin
JD Martin
Northeast, TN
1.11
Score

General Landlording & Rental Properties Trending Discussions

  • ‘What’s in your garage’?
    30 Replies
  • How do I veil tenants from knowing I am the property owner?
    13 Replies
  • How to find out going rate for rental properties?
    6 Replies
  • LLC For First Property / Managing?
    6 Replies
  • Do you want to continue? Advice needed on if to sell a rental.
    5 Replies
Log in Sign up

Log in

Forgot password?

If you signed up for BiggerPockets via Facebook, you can log in with just one click!

Log in with Facebook

Or
btn_google_dark_normal_ios Created with Sketch. Continue with Google

Let's get started

We just need a few details to get you set up and ready to go!

Use your real name

Use at least 8 characters. Using a phrase of random words (like: paper Dog team blue) is secure and easy to remember.

By signing up, you indicate that you agree to the BiggerPockets Terms & Conditions.

Or
btn_google_dark_normal_ios Created with Sketch. Continue with Google

Why create an account?

Receive a free digital download of The Ultimate Beginner's Guide to Real Estate Investing.

Connect with 1,000,000+ real estate investors!

Find local real estate meetups and events in your area.

Start analyzing real estate properties, we do the math for you.

It's free!

Explore

  • Membership
  • Community
  • Education
  • Marketplace
  • Tools
  • FilePlace
  • REI Resources
  • Perks
  • Glossary
  • Reviews
  • iOS App
  • Android App

Company

  • About Us
  • Press
  • Advertising
  • Careers
  • Stats
  • Contact Us

Important

  • Editorial Guidelines
  • Terms of Use
  • Rules
  • Privacy
  • FAQ

Social

  • Facebook
  • Twitter
  • YouTube
  • Instagram
© 2004-2021 BiggerPockets, LLC. All Rights Reserved.