If you’re considering moving into a new house for rent, you’re likely to have a whole ream of decisions to make. However, the decision at the top of your list should be what type of lease term to choose.
While a long-term lease is generally the most common, you might find that a month-to-month rental agreement is the better choice for you. With both pros and cons to weigh up, let’s take a look at everything you need to know if you’re considering a month-to-month house rental agreement.
How Does a Month-To-Month Rental Agreement Work?
A conventional long-term lease ties you into renting a place for a full year, or, in some cases, even longer. Meanwhile, a month-to-month rental agreement enables you to rent a house without a fixed termination date. Each month, the tenancy automatically renews, allowing you to rent for as little or as long as you need. When you’re ready to leave, you need only give 30 days’ notice.
Once your tenancy begins, the experience is more or less the same as a long-term rental. The only difference is you can leave at any time once you’ve given your 30-day notice, without being penalized for breaking your lease agreement.
Are Month-To-Month and Short-Term Leases the Same?
While similar, short-term leases do differ from month-to-month rentals in several ways. Most notably, a month-to-month lease doesn’t specify an end date. Meanwhile, a short-term rental will be for a fixed term, typically three or six months.
This results in short-term leases being less flexible, with renters having to pay fees for breaking the agreement and moving out early. Having said that, they can be a great choice for students or temporary workers who know they’ll need to stay somewhere for a set amount of time.
The Advantages of a Month-To-Month Rental Agreement
1. Flexibility
The main advantage of renting a house on a month-to-month basis is that it gives you tremendous flexibility. As such, it’s a great way to get a feel for a certain location. If you’re not happy with the neighborhood, it’s easy to move out without waiting for a longer-term lease to expire.
Likewise, if you need to relocate for work, financial, or even health reasons, you can do so with ease. Simply give your 30-day notice and start looking elsewhere.
2. Peace of Mind
Living in a month-to-month rental can also do wonders for your mental well-being. Without a pre-determined end date, there’s no need to worry about penalty fees or finding someone to sublet your home if you do need to move out at short notice.
At the same time, if you find yourself falling in love with your rental, you can stay for as long as you like. In some cases, you may even be able to switch to a long-term rental agreement.
3. Financial Flexibility
Seen a better offer elsewhere? Renting on a month-to-month basis allows you to take advantage of rental price drops in your local market with ease, rather than being stuck paying a higher fee for longer than necessary.
The Disadvantages of a Month-To-Month Rental Agreement
1. Less Stability
Not having a pre-determined end date on your lease can be a double-edged sword. Many landlords allow month-to-month rentals as it affords them the flexibility to do something else with the space, such as sell it, while keeping it occupied in the interim. They only need to give you 30 days’ notice before evicting you, so technically you’re always only a month away from having to find a new place to rent.
For tenants craving stability, a long-term rental is generally a better option. Otherwise, it’s wise to have a backup plan in place in case you need to move out quickly.
2. Typically Higher Rent
For a landlord, a month-to-month rental comes with greater risks than a long-term one in that the unit has a greater chance of sitting vacant between tenants. To manage this risk, they’ll generally charge a higher monthly rent compared to if they were renting it long-term. For the tenant, this means paying more each month than long-term renters in comparable rentals.
3. Risk of Rent Increases
Since the tenancy agreement is only a month at a time, it’s easy for the landlord to increase the rent at short notice. However, they will normally be required by law to give 30 days’ notice, allowing the tenant to move out if the financial burden becomes too much. But, ultimately, month-to-month tenants are at a much higher risk of sudden rent increases than long-term tenants.
When a Month-To-Month Rental Can Work for You
Having weighed up the pros and cons, you might still be wondering whether a month-to-month house rental agreement is the best choice for you. With that in mind, here are a few scenarios where it can be a top choice.
1. You’re Buying a Home
If you’re currently on a long-term lease but are planning to buy a home, switching to a month-to-month lease once you reach the end of the tenancy can be a great option, as long as your landlord allows it. It enables you to stay where you are while you house hunt, yet gives you the flexibility to move in and save on rent costs if the buying process goes quickly.
2. You’re Changing Your Job
Likewise, if you plan to switch job and your current long-term lease is ending, you can certainly benefit from the flexibility of a month-to-month lease. It doesn’t tie you down to a certain place, enabling you to seek out jobs in a far wider area, giving you much more choice.
3. You’re Caring for Family Members
If you find yourself needing to care for an ill relative, a month-to-month rental can enable you to spend time with them, while giving you your own space for as long or as little as you need it for.
4. You’re a Remote Worker
Working remotely and want to experience life in different locations? A month-to-month house rental agreement allows you to dip in and out of various locations until you find the place that clicks.
