As an investor who didn't grew up in the states. I'm interested to know what is more common in the us month to month or lease.
Is there anyone who can figure out an assessment for that? maybe even just a guts feeling about it.
Is there a good resource I can get a precise answer to that?
Thanks in advance,
Hello, Gon. Do you mean a month-to-month lease or 12 month/full year lease? If so, I would have to say that a 12-month/full year lease is more common, at least up here in Pennsylvania it's what I see more of. For me and my husband, we feel that a 12 month lease brings us more financial security and peace of mind. If you get a good tenant, knowing your'e getting a steady rent for at least a year makes you feel more secured than a month-to-month lease, which in my opnion would be extremely nerve wracking! I don't have actual stats, just my personal opinion.
Best of luck to you!
@Gon Eisenberg A 12 month lease is more common than a month to month lease in my area. Like Sarah said, it provides you with a reasonable amount of security having a set amount of months on the books. I never do a month to month and probably wouldn't consider it unless it was for a perfect tenant who only needed to extend for a short period. Check with your state and attend some REI groups near you to see what other landlords in your area are doing.
In my opinion, what is common is not as important as what works best for your situation.
As has been said, a one or two year lease does give most landlords a sense of security.
I have both situations and have found that each seems to have its benefits. While a long-term lease gives a landlord peace of mind, I have found that it also causes the tenant to reevaluate their situation each renewal time. Whereas a month to month tenant plods on through life, someone facing another contract seems to be more likely to "look around" each year or so.
I have been blessed to have very little vacancy with the month to month tenants.
Thank you all for the replies!
It is good to know that there is a thriving landlords community.
@Daniel Mohnkern - I had never thought of a month-month lease in the way you describe it. A yearly lease does certainly force someone to evaluate whether or not they want to make a new commitment to stay in their current home. However, if the landlord has done their job then the tenant wants because they are being provided all the things they expected originally. Most people, I feel, move because they want something different. If different is what they want, then they'll leave no matter what the lease term is.
Also, with a 1 year lease you know the time of year you will always be filling a potential vacancy. In some markets this is very important as winter months provide horrible times for a move-in thus less people looking to find a new place.
The 12 month lease is pretty common due the factors the others have mentioned (potential vacancy, costs for finding, qualifying tenant, stress on landlord, if unfurnished potential damages and repairs due to frequent moving.)
In Florida you need to be careful with the Home Owners Association and Condo Owners Associations because a lot of times in the documents they state you can only rent out the property X amount of times a year.
I do a month-to-month lease. If they want to go they can, and if I want them gone, they go. I couldn't imagine being stuck with a bad tenant for the full 12 months. A lot of people that look good on paper are not! I would rather have an empty apartment than a bad tenant.
I agree with Courtney. Good landlords and good tenants do not need a 12-month lease. Bad landlords and bad tenants both appreciate the "security" of the 12-month lease. What is more common is not necessarily the deciding factor.