Comment Month-to-Month Rental/Lease Agreement with airSlate SignNow

Electronic signature chicago rental lease agreement

so your chinese lease is coming up for renewal and you want them to sign another year lease term but they don't want to do that they want to go on a month-to-month lease do you do it in this video you'll find out some of the disadvantages of letting your tenant go on a month-to-month basis and if they do have to go out a month month what can you do to protect yourself for the best landlord tips and tricks subscribe to our channel and hit the bell so you'll be notified right away when we post new videos each and every Wednesday did you know that allowing a tenant to go month-to-month could cost you money so let's say your tents lease is up for renewal and they say you know can we just go month-to-month we don't know what our plans are we don't want to commit to a year lease and so you think about it and you're you're thinking well why not they've been good tenants I'll just give them a break we can just go month-to-month what's the harm so you need to think twice about that because letting your tenant go month-to-month might be a little bit more of a bigger deal than you think by the end of this video you'll know some of the pros and a lot of the cons of letting the tenant go month-to-month and what you can do to make sure you're covered hi there my name is sue Richey I'm the co-founder and the broker of Richie property management we're a residential property management firm and a real estate brokerage in the Northern Virginia area so first let's talk about three disadvantages of month-to-month leases first of all with a month-to-month lease you can't guarantee the rental cycle and what I mean by rental cycle is you ideally you want to stay in a spring summer rental cycle so most leases are about a year so if you're anywhere from let's say March into July August if you just do a year lease from March tomorrow April to April that's a great rental cycle you have a lot more people that are active looking they're making changes in the summer people leave when the kids are out of school different kinds of jobs military Foreign Service they have certain times of year where they leave most of that happen in the spring and summer so you have a huge pool of potential tenants at that time of year as opposed to other times so having a set lease term during that cycle is ideal month to month doesn't guarantee that at all and it could end up that you have a vacancy or your tenant leaves at a bad time of year also a month-to-month lease could mean a lower rental rate now we did a video recently about clauses that you can put into your leases about if you have to have a month-to-month and to have an increase in your rent so you could get more money but if your tenant goes month-to-month and you keep the rent that's let's say you keep it the same and they end up leaving in November or December now you're in a horrible time of year to rent I mean you'll get it you may get a tenant but you have less people looking and if the property is sitting vacant for a while you may have to reduce your price well below the market just to get someone in there paying rent and then you're locked in to that rate for another year so that's a huge disadvantage because you might end up with a lower than market rental rate and the third disadvantage is just the plain uncertainty with a month-to-month let's say your tenant has to give you 30 or 60 day notice when they want to leave you have no idea and you can't really do any planning with a year lease you can plan on let's say some improvements in the property you know you're gonna be getting rent for that that full year you can plan other things you can plan to you can just budget to know you're going to have that income on a month-to-month it could stop anytime with 30 days or 60 days notice so the uncertainty is another disadvantage of a month-to-month lease now sometimes a longer term lease just isn't going to work at all because the tenant situation and maybe you just agree okay we're gonna do a month-to-month lease but there are still a few things that you can put into a month-to-month agreement to protect yourself one you want to put a clause in there that increases the rent at a premium if the tenant goes month-to-month so let's say your rent is $2,000 a month at a normal during the normal lease period and you just tell the tenant okay well I'll allow you to go month-to-month and we'll have a 10% increase in the rent so now the rent is 2,200 a month if they're okay with that then at least you've got a little bit of a premium and you're taking on more risk but you're getting a little bit more money another clause you want to add if you allow your tenant to go month-to-month is add some language in there that says that they cannot break the lease during the winter months we have this in our lease agreements so even if if the owner is okay with it we still do not allow them to leave in the winter months of November December January because in our area in the Washington DC area we do get snow we get bad weather and that's a really bad time of year to re rent the property so we do have that language in there that's something else you might want to consider and lastly you want to make sure you have enough reserves if you're a landlord that should just be a given you need to always have reserves but in particular if you have a month-to-month lease just like I said there's a lot of uncertainty as to when they'll end and if it isn't a great time of year you might have a vacancy for awhile so you need to make sure you have plenty of reserves in the event the home sits vacant longer than it might have at another time of year if you have had any pros or cons with month-to-month leases that you've used with any of your tenants please put them in the comments below we'd love to hear any anything that's worked or not worked but are there advantages to a month-to-month lease there are a few and it really depends on your market and your tenant pool so let's talk about a couple of those so if your tenant pool is questionable or if you don't have a lot of variability in your market then a month-to-month lease might not be that bad why well a few reasons one you're not locked into a long term so you can kick out a tenant really quickly so if a tenant is bad they don't pay you're not locked into them for a year so you can give them 30 or 60 day notice and get rid of them also if there are terms that you need to change you can change those quickly you can change them whenever you need to so again you're not locked in to a one-year lease and lastly you can get rid of bad tenants fast so now that you know some of the disadvantages and a few advantages of a month-to-month lease you have to decide what makes sense for you and use those strategies in your lease if this video is helpful and you liked it please let us know by hitting the like button below and subscribing to our Channel and sharing this video with other landlords who could use this sort of information thanks again for watching and we'll see you in the next video