A month-to-month lease is a rental lease agreement that’s renewed at the beginning of each month. Traditional leases are typically for a longer period of time — at least three months and often as long as two years. There are pros and cons to month-to-month lease agreements and they aren’t well suited for every renter.
1. A month-to-month lease makes it easier to move out
One of the most common reasons renters choose a month-to-month lease is because of the freedom it offers. Since month-to-month leases are renewed monthly, you have a chance to move out of your rental at the same frequency. Breaking a lease can be costly, so if your lease is rather long, say a year or more, you can be stuck in the same place until the lease is over. For this same reason, month-to-month leases are also often used for short term renting in the interim between two more permanent living situations.
2. Month-to-month leases decrease your housing security
One of the downsides of a month-to-month lease is the lack of housing guarantee it offers. When you sign long-term leases, you’re guaranteed a home through the duration of that lease unless you do something worthy of eviction. With a month-to-month lease, the property owner gets a fresh chance to consider renewal roughly every 30 days. If the property owner were to change their mind about renting, they have plenty of opportunities to end the agreement with you.
3. It might be more costly to rent on a month-to-month basis
Another downside of month-to-month leases is higher rent. Longer leases often come with discounted rent rates because the property owner has guaranteed income for a longer period of time. Conversely, shorter leases often have higher rents. Because a month-to-month lease is basically the shortest lease available, rents are often inflated. It can be a risky move for property owners to allow tenants to rent on a month-to-month basis, so the higher rents act as a security blanket.
Do your research and pick the option best suited for you
A month-to-month lease isn’t usually cheaper, but it certainly is more convenient. Deciding what your needs are specifically will lead you to make the best decision. If your life is in a period of transition, and you can afford it, consider a short-term lease. If you don’t anticipate moving in the near future, a long-term lease is probably the most cost-effective choice for you.
