Should Renters Sign a Month-to-Month Lease for an Apartment?
When an apartment is leased, it is leased, right? Actually, there are different ways to enter into a leasing contract. What is the best way to lease an apartment? Month-to-month leases could work for you, if you also understand some of the potential pitfalls of this type of lease.
What Types of Leases Exist?
When tenants rent an apartment, most people sign a 12-month lease. This lease does not run from January to December but from the month you begin to the same month the next year. This gives you some certainty about where you will be living, and it gives your landlords certainty of income as well.
However, other people prefer to rent on a month-to-month basis. They are essentially renewing their commitment to stay every month.
Are There Advantages to a Month-to-Month Lease?
While it might seem less stable, a month-to-month lease has a lot of advantages for some tenants. What are some situations in which it makes sense to rent an apartment on a month-to-month basis?
You move a lot. Whether you like to find new apartments in different parts of the city or you have a job that takes you from place to place, having a month-to-month lease gives you the flexibility to pick up and go on short notice. You also have the advantage of being able to commit to a longer leasing contract at any time.
You do not want a financial penalty. If you are in a 12-month contract, you will get penalized for breaking the lease. You will probably need to pay the rent until the landlord finds someone else who can take over the lease. If you are not in a contract, then there is no penalty for moving at the wrong time.
What Are the Disadvantages of a Month-to-Month Lease?
Why would people choose a longer-term lease? Often, it is for security. If you know that you will be living in a place for a year or more, that lease gives you a feeling of security and an ability to count on your housing. When you are not locked into a long-term contract, there is nothing preventing your landlord from raising your rent or terminating your lease while you're living in the apartment.
Month-to-month leases tend to be more expensive. With commitment comes a financial bonus.
If you have only ever had a month-to-month lease and a future landlord discovers this, then he or she could be less willing to rent an apartment to you. On paper, it looks like you might move quickly, and if that is not what the landlord wants, then you might not get that new apartment.
If you move a lot, then that can lead to a poor credit report. That is because each successive landlord looks at your credit history. The more often people access your credit report, the more your credit score can drop.
Probably the most challenging element of month-to-month leases is that they are difficult to find. Most landlords and management companies prefer to lease to people who are willing to make a long term commitment, since it is less expensive for the manager to get the property organized for rental and do background and credit checks once a year.
No matter what kind of home you choose, Open for Homes is here to help you find the right home for you. Visit the blog at Open For Homes today and learn more about renting and buying real estate.