Most folks generally think of a 12-month long lease whenever the topic of renting comes around. However, as we’ve previously explored, lease terms can be anything that the landlord and the renter have agreed upon. Most renters will opt for the traditional 12-month lease agreement or longer 18-month to 24-month terms. However, some will opt for shorter terms. Depending on their needs, some renters may opt for a short-term lease (anything under a year) or may even decide to go for a month-to-month lease agreement. 

What is a month-to-month lease?

Unlike the traditional fix-term leases, month-to-month lease agreements are a type of rolling contract that automatically renew and continue for successive periods until either party provides a legal notice to terminate the lease. The timeframe for a successive period can be whatever is agreed upon, but usually, most agree on a month. Also known as periodic tenancy, these types of rental agreements are flexible and are not set with a predetermined termination date. This means the month-to-month lease could continue to be renewed for years. However, the lack of a predetermined termination date means that either party could terminate the lease at any given time, sometimes even after a single month of occupancy.  

Pros and Cons of renting month to month

Like any other type of lease, signing a month-to-month lease agreement has its pros and cons. The primary benefit of this type of lease agreement is its flexibility. Renters can terminate their agreement at any time, unlike typical fix-term leases, which may include a penalty for breaking your tenancy earlier. In some areas, renters remain liable for the remainder of their lease term unless they pay an early termination fee or find a new tenant to take over their lease or sign a new lease. For example, in New Jersey, it’s a common practice for landlords to charge their tenants two months’ rent as an early termination fee. With a month-to-month lease, you do not need to worry about such penalties. This is a huge bonus that many desire; however, some downsides need to be considered.

First, there are fewer protections for those who sign a month-to-month lease agreement. Landlords can make changes in lease terms right before each period term. Which doesn’t offer much stability or security for the renter. 

Can a landlord terminate a month-to-month lease without cause?

Next, it’s worth noting that renters aren’t the only ones to benefit from the flexibility to cancel. Landlords who approve and agree to this type of flexible rental agreement will also have the same flexibility to terminate whenever they want (with enough advance notice). For some renters, this may cause a lot of undue stress.

Do I pay more in rent?

Landlords will typically reward renters who sign a longer lease with better-priced monthly rental rates. It’s like buying wholesale or purchasing in bulk. The more you purchase, the more of a discount you may receive per item. Renters who sign a month-to-month lease will not benefit from such discounts. They will generally pay more out of pocket on a monthly basis. 

Can my rent be increased every month? 

Yes, that is one of the main downsides to signing a month-to-month lease. Renters who sign a traditional fix-term lease are locked in at an agreed-upon rental price when signing their lease. Under this type of flexible-term lease, your landlord can increase your rent before your lease renewal period. Thankfully, most of these types of rental agreements will require that the landlord provides at least a 30-day notice prior to the rent increase. So if the increased rent is no longer doable, a tenant should have the opportunity to negotiate OR find a new rental situation. 

Who does a month-to-month lease benefit? 

A month-to-month lease isn’t for everyone. However, there are a variety of reasons as to why someone would opt for one. As a renter, the flexibility that this type of rental agreement offers is good for those who:

• Move around frequently. The ability to cancel and move out of a home without a penalty is great for renters with short-term or seasonal gigs and contract work. 
• Are facing a sudden major life event such as a breakup, divorce, job change, etc. Although the need for a new living situation is urgent, they may not want to commit themselves immediately to a long-term situation.
• Are current homeowners waiting for home renovations and/or constructions to be completed or looking to sell their current home and purchase a new home. 
• Are current renters in the process of purchasing their new home.
• Want to try out an area or location before they fully commit to a year-long lease or home purchase. 

For some landlords, this type of lease is appealing for those who: 

• Are interested in placing their property up for sale in the near future but still want to make rental income in the meantime.
• Are okay with the instability that this type of rental agreement means and would prefer to make a higher monthly rental income. 

How to cancel/terminate a month-to-month lease?

Most month-to-month lease agreements will require that either party provide a 30-day advance notice to terminate. This will have to be done via a formal notice to vacate letter. It’s best to check over your lease and also local laws to adhere to the requirements for termination. Once your landlord has confirmed receipt of your notice, be sure to schedule a final apartment inspection and walkthrough and discuss the return of your security deposit. 

Where to find a month-to-month lease near me? 

Month-to-month leases can be located on major rental listing sites such as RentHop. Search for listings that allow for “short-term” leases. From there, you can discuss your desire for a flexible lease agreement with the landlord. Note, if the listing doesn’t explicitly state that it allows for short-term. It doesn’t hurt to ask if the landlord would be open to a short-term situation. Present your case in a respectful manner and let the landlord understand your reasonings for a flexible month-to-month lease. Just be prepared to pay more in monthly rent. You may also need to provide more references or proof that you’ll be a good tenant for the landlord.