When renting a home or apartment, renters are often faced with the question of whether to sign a long-term lease of a year or more or sign a month-to-month lease. The decision can have a significant impact on the finances and security of the renter so it is important that the decision be considered carefully before it is made. Unfortunately, many people do not consider all of the factors before making their choice. Here are some of the main advantages and disadvantages of choosing a month-to-month lease.
The biggest advantage of month-to-month leases is the flexibility they give to the renter. With these leases, the renter can leave the home and end the lease at any time as long as they give the property owner the appropriate amount of notice. This is great if you must move to another area for employment or family reasons. Short term leases like month to month leases gives you the ability to do what you need to do without having to pay a hefty charge for breaking your lease or having to find someone else to assume the rest of your lease for you.
Once you have arrived in a new city, you can use month-to-month leases to stay in several different neighborhoods over the course of a year or two to see which one would be the best one to move to permanently. If you find a place that you really like, it is usually easy to convert a month-to-month lease to a lease with a longer term. Property owners love it when tenants decide to stay for lengthy periods of time because it guarantees them income from the property for a set amount of time and they do not have to spend money turning the property for a new renter.
It is important to think about the disadvantages associated with month-to-month leases as well when making your decision. Month to month leases are often more expensive than long-term leases. The difference between the two could be several hundred or several thousand dollars over the course of a year. If you are committed to staying in a particular area for a significant amount of time, you can save a lot of money by signing a longer lease. Month to month leases also mean more flexibility for the property owner to terminate your lease or raise your rent while you are living in the rental property.
By carefully considering all of your options and their financial impact, you will have an easier time making the decision on whether a month-to-month lease is the right lease for you.
Join our newsletter
Subscribe to get the latest "Engineer Your Finances" content via email.