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Benefits of Offering Month-to-Month Leases

There are plenty of ways to offer flexibility to your tenants, whether you offer a shorter lease term, extra amenities, or a discounted rental rate. One of the most common ways to cater to a tenant’s renting needs while also benefiting yourself is by offering a month-to-month lease. Month-to-month leases are great for traveling tenants or landlords who want more flexibility with their properties. Today, we’ll review some of the benefits and when you might offer a month-to-month rental agreement. 

Contents of This Article: 

What Is a Month-to-Month Lease?

As a landlord, you can rent your property for a fixed term, whether six or twelve months, or on a month-to-month basis. That said, it’s important for landlords and Baltimore property management companies to learn the pros and cons of each lease type. 


A month-to-month lease is just what the name suggests. It’s a legally binding agreement between a landlord and a tenant that continues each month until either party terminates it. Usually, the landlord or tenant must provide 30 days’ notice if they plan to terminate the agreement. 

That said, most month-to-month leases are used to extend existing lease agreements. In this case, a tenant may not be ready to move out or renew their contract after a fixed lease term. However, it’s also possible for landlords and tenants to sign a month-to-month lease from the beginning. There are several reasons why a landlord may offer a month-to-month lease. Keep reading to learn why!

Why Offer a Month-to-Month Lease?

There are several reasons why you may offer a month-to-month lease instead of a longer lease contract. For instance, while some people prefer the predictability and reliability of a fixed-term lease, a month-to-month lease is great for those who seek flexibility. 

Luckily, this type of lease agreement provides flexibility for both parties. For example, tenants can move out on relatively short notice, usually 30 days. On the other hand, landlords can adjust rental terms or terminate the lease with similar notice. 

So, if you’re a landlord who wants to cater to tenants’ short-term needs while also having the flexibility of adjusting your rates and terms, a month-to-month lease could be great for you. 

Benefits of Month-to-Month Leases

A month-to-month lease can be great for landlords and tenants looking for more flexibility. Short-term leases are a great solution if your tenant is looking for a temporary place to stay or you plan on selling your property soon.


That way, you can still earn an income from your properties without a long-term commitment. Here are some of the other benefits of month-to-month leases. 

  1. Automatic Renewals- Month-to-month leases generally come with automatic renewals, which means the lease is automatically extended for another month unless terminated by you or your tenant. This provides continuity for both parties without renegotiating terms every month.
  2. Flexible End Dates- Month-to-month leases offer flexibility in terms of end dates. Unlike fixed-term leases with a predetermined expiration date, tenants and landlords can end the lease at the end of any month. This is great for tenants who may have uncertainty in their future plans.
  3. Ability to Raise Rent Prices- Landlords can adjust rent prices more frequently with month-to-month leases. This flexibility allows you to adapt to market conditions, property values, or other factors influencing rental rates. In turn, it provides more chances to implement rent increases if needed.
  4. Landlord Can Terminate Lease- Landlords have the right to terminate a month-to-month lease with proper notice, typically around 30 days. This flexibility can be beneficial if you have plans for the property, such as renovations, selling, or changing its use. Ultimately, it gives you more control over the property’s future.
  5. Keep Good Tenants- If you have a great tenant who’s not ready to renew or sign a fixed-term lease, you can give them the option to sign a month-to-month lease instead. That way, you can keep a reliable tenant longer until they sign another fixed-term lease or move out, saving you from having a vacant unit or finding a new tenant. 

Disadvantages of Month-to-Month Leases

While there are several benefits to month-to-month leases, it’s important to understand some of the disadvantages. Here’s what you should consider before offering a short-term lease. 

  • Lack of Stability- Month-to-month leases lack the stability and predictability of a fixed-term lease. This can disadvantage landlords who want a more consistent and secure rental income. The potential for frequent tenant turnover can create uncertainties in your future financial planning.
  • Uncertain End Date- With month-to-month leases, there is no predetermined end date. This can be challenging if you want to plan for future use of the property. Whether you plan on coordinating renovations or selling the property, the lack of a clear timeline can make it difficult to make long-term decisions regarding the property.
  • Short Notice for Move-Outs- Landlords and tenants can terminate a month-to-month lease with relatively short notice. While this flexibility benefits tenants, it can be challenging to fill sudden vacancies quickly. Unfortunately, this can lead to potential gaps in rental income and increased marketing and screening efforts to find new tenants.
  • Risk of Vacancies- Month-to-month leases pose a higher risk of vacancies for landlords. After all, tenants can choose to move out with short notice, leaving landlords with unoccupied properties. This unpredictability can result in vacancy periods, impacting the ability to generate consistent rental income.

Create the Perfect Lease With BMG

Month-to-month leases are great for several reasons, benefiting both landlords and tenants. However, it’s important to consider some of the disadvantages while creating lease terms for your tenants. Whether you offer fixed-term-only agreements or month-to-month leases, it’s important to have strong terms to ensure fairness for both parties. If you need help creating strong, legally binding lease agreements, hiring a professional property management team can help. 

Learn how bmg can help your rental business today!

Luckily, Bay Property Management Group has the expertise to help you create excellent lease agreements that cover all the necessities. Additionally, we can help with any of your property management needs, whether it’s rental marketing, tenant screening, rent collection, maintenance, and more. Contact us today to learn more about our services throughout Baltimore, Philadelphia, Northern Virginia, and Washington, DC.