Do You Allow Month-to-Month Leases? Why or Why Not?

Question

Some investors love the flexibility of month-to-month; others prefer long-term stability.

What’s your policy, and what’s shaped that decision?

Have you seen:

• Higher turnover?

• Better rent control?

• More or fewer headaches overall?

Interested in hearing real experiences.

Michael Smythe · Answer

@Kelly Schroeder as @Srinivasa Subramanian mentions, we don't recommend using a one-size-fits-all approach.

Things to consider:

1) State & local lawsIn Michigan, if a lease is a minimum of 12 months, you can charge a tenant the first $x amount of any and all repairs. Otherwise, only if you can prove tenant caused the damages.

2) Tenant ClassClass A & most Class B tenants will honor lease to protect their credit.Class C & D tenants - will break a lease whenever:(

3) Owner IntentionsSri already covered

4) TimingWe don't allow M2M during Nov-Feb, worst time to find new tenants. We even address this in our M2M lease which has a clause that states unless tenant gives notice BEFORE October 1, their M2M lease locks them in until Feb 28.

Mark Turner · Answer

Everyone starts off with a 12 month lease, then they transition to month-to-month.  I've had tenants on this for 10+years.  Gives them flexibility to leave and me if we need to make changes.  Quite honestly, in NY there's not a lot of protection for landlords anyway.  I'd rather they leave and not damage the apartment than me forcing them to stay the whole time and risk damage.

Colleen F. · Answer

@Kelly Schroeder I used to use annual leases but got two vacancies during covid. I went month to month with those new tenants.  They were essential employees or had places to go if they lost work but I also  felt more comfortable with the shorter commitment and they were willing. Both are still with me. Generally I now do 6 month with a month to month renewal, 60 days notice. People generally leave when they want to leave and the only advantage with a year is you can collect a penalty if they break the lease.

Theresa Harris · Answer

I prefer annual leases simply due to the areas I am in being very tenant friendly.

Michael K Gallagher · Answer

generally do 12+ month leases, offering incentives for longer, and then the lease generally automatically carries over into MTM after that. very rarely do we start out with MTM.

Srinivasa Subramanian · Answer

@Kelly Schroeder As a property manager, we generally prefer 12-month leases, but we do keep month-to-month as a tool, not a default. We tailor our approach to each owner, and we do have a few landlords who like M2M—usually because they’re planning to sell, renovate, or need short-term flexibility.

Three main reasons shape our preference for annual leases:

• Stability for both sides — predictable income and fewer vacancy risks.
• Cleaner planning for maintenance, renewals, and turnovers when there’s a clear cycle.
• Peace of mind — consistent income helps both owners and us plan finances without surprise gaps.

Stability for both sides — predictable income and fewer vacancy risks.

Cleaner planning for maintenance, renewals, and turnovers when there’s a clear cycle.

Peace of mind — consistent income helps both owners and us plan finances without surprise gaps.

Where M2M becomes tricky is timing. Yes, it gives flexibility and allows for easier rent adjustments, but we’ve learned the hard way that if a tenant decides to leave during winter, it can be extremely difficult to fill a vacancy. That risk often outweighs the benefits.

So as an organization, we usually advise our clients to stick with year-long leases unless there’s a very specific reason to go month-to-month.

Lokesh W. · Answer

IF the tenant is bad/ problematic, then I know a few people who go for month to month just because it gives the flexibility to end their stay by giving 60-day vacate notice.

Lauren Kormylo · Answer

I only have one LTR and prefer M2M because I want the option of getting a bad tenant out quickly.  Even on M2M, I've never had a tenant stay less than a year.  It's a 3 bedroom house, so most tenants don't want to move all their furniture again after only a few months. I would not rent to someone who was only planning on being there a short time.

Jules Aton · Answer

First is one year then automatically converts to month to month unless tenant specifically asks to renew for a year. In my experience if someone wants or has to leave they will go and I have honored that in an effort to avoid hassles. Most importantly I like the flexibility of asking someone to leave with 60 days notice for whatever reason. I've done RE for over 30 years but haven't ever bought a property that I didn't plan to sell at some point.

Melanie Thomas · Answer

We try to avoid month to month leases when we can, but sometimes they are unavoidable. At scale they are a big headache to track and require extra follow up, so we do charge an additional month to month fee. In our experience they can lead to higher turnover, but the real issue is the extra workload they create for the team.

Do You Allow Month-to-Month Leases? Why or Why Not?

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