Lease Renewal vs Month to Month
I would like to get some investors' opinions on the pros and cons they have experienced on renewing a tenant's lease or just letting them go month to month. If you have a good tenant and don't want them to leave, does it make sense to do a renewal and risk them denying the renewal and even potentially moving out because of that?
Most Popular Reply
I generally preferred renewing good tenants because predictable occupancy is worth a lot more than preserving maximum flexibility.
Offering a renewal doesn’t have to force the tenant into a decision to leave. You can ask about their plans first, offer another fixed term, and explain what happens if they prefer month to month. I’d also consider when the new lease would expire. Avoiding a vacancy during the weakest rental season can matter as much as the rent increase.
Month to month makes more sense when you expect to sell, renovate, or are not yet confident you want the tenancy to continue. Otherwise, I’d usually take the stability of a renewal.