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Property Management Blog

Month-to-Month Leases

Month-to-Month Leases

Many owners come to us with an existing month-to-month lease in place, or a lease that is about to expire and they want us to let the tenant stay on a month-to-month basis. In other cases, the tenant requests a month-to-month lease. Universally, we discourage any owner from accepting a month-to-month lease. Why?

Month-to-month leases put you a distinct disadvantage. It's very easy for a tenant to find a place to live on a moment's notice. Worst case scenario, there are always apartments available, even in the most high demand areas in Atlanta. So the tenant has everything to gain from a month-to-month lease. They don't get tied down to a long-term legal document, and they can pick up and leave at any time with short notice.

By contrast, finding a quality tenant isn't nearly as easy for an owner as finding a new rental is for a quality tenant. While you may be confident that you'll find a new tenant quickly because you have a nice house in a nice neighborhood, sometimes you get surprised and it takes longer than expected. Sometimes this is because the tenant vacates the property at the worst time of year (around the holidays), and sometimes it may be other external factors. Whatever the reason, the tenant has gotten away from their financial obligations, and you're still left with yours. Furthermore, you have costs associated with finding a new tenant, while the tenant has no costs associated with finding a new rental as long as they don't leave the property damaged and lose some of their security deposit.

What all of this means is that a month-to-month lease is all in favor of the tenant, and not at all in your favor. You are placed at a distinct disadvantage. We recommend never accepting a month-to-month lease from a tenant. Insist upon at least a 6-month lease agreement. Otherwise, give them notice to vacate and work on finding a tenant that will sign a real agreement.