Every lease agreement addresses the length of occupancy of the rental property. The majority of leases are usually for one year with the option to continue on a month to month basis. However, some leases can start out on a month to month basis. A month to month lease applies each month until the landlord or tenant exercises the required advance notice to vacate or terminate the lease. Here is a look at the pros and cons of month to month leases:
Probably the most important pro is the flexibility for both landlord and tenant to not be locked into a lengthy lease term. Tenants who are uncertain of the area or of their job situation may prefer the flexibility of a month to month lease. Landlords benefit by having the freedom to do as they wish with the property whether it be construction-related or wanting to change terms of the lease without facing a lengthy time commitment before being able to make changes.
Pro: Higher Rents
Landlords can generally charge a higher rent amount for month to month leases. The risk involved with a shorter term lease where tenants can move out at any time (with the proper advanced notice) can be offset with the higher rent required with a month to month rental lease.
Con: Turnover Costs
Landlords incur costs every time they have a new tenant: advertising costs, screening costs, property upkeep costs. So when a tenant does not stay for very long, landlords need to start the process all over to fill the vacancy. The time crunch to fill a vacancy can create pressure, so the fewer turnovers landlords face, the less pressure they have to hurry and fill vacancies.
Con: Less Stable Income
Because a tenant can move out at any time (with the agreed upon advance notice) with a month to month lease, a landlord may not be able to fill the vacancy in a timely manner. For example, if the tenant vacates in the middle of winter, it may be harder to find a new tenant during that season. An empty unit means no rental income.
There are pros and cons with month to month leases. For landlords who opt to offer such, they can use an online rent payment service that makes managing rents for month to month leases easier for both themselves and tenants. When it comes to the type of lease term, landlords and tenants can consider if a month to month rental lease is good for them.
When Did Rent Payment Get Added to Credit History?
In the 2000s, in the United States, the big 3 credit bureaus started to look at adding rent payment information to an individual’s credit history. Initially, they offered this only to some people who rented from the largest apartment companies.
Every business needs customers to generate revenue. For landlords, those customers are tenants. So when a tenant vacates, it is critical for the landlord to fill the empty unit as quickly as possible. The longer the rental property is empty, the longer the landlord does not make any money. Here are some tips on how landlords can advertise rental property effectively:
1. Decide Where to Advertise
Landlords should think about where most of their tenants will search for an available property to rent. Online advertising is one of the most popular and wide-reaching methods today. Landlords can advertise listings with a real estate specific site such as Zillow (note: Zillow has started charging $9/week for ads for a property) or Apartments.com. Other online options include social media platforms like Facebook or Nextdoor or a more general site such as the very popular Craigslist. A simple yard sign can still catch the eyes of a promising tenant.
2. Post High Quality Pictures
For tenants who prefer to search online, pictures become a critical basis for decision making. Landlords should post high quality photos of the empty unit so tenants searching online have a good idea of the rental property and can make a decision from the photos alone. Once a tenant is serious, they benefit from a physical walk through of the rental property.
3. Be Responsive to Inquiries
In describing your rental property, identify key selling points. For example, you will want to mention if you accept online rent payment, as that may be an important criteria for tenants. While the description of your property for rent should be thorough, tenants may have questions. Providing accurate contact information and responding promptly to inquiries makes your unit and your reputation as a landlord positive selling points. Being a responsive landlord will help you meet your goal of filling your vacancy as quickly as possible.
Good Advertising will Fill an Empty Unit
Advertising your rental property online or on paper, showing your rental property with good pictures, and being responsive to inquiries are all steps in the right direction to filling your vacancy.
As the oldest and most experienced online rent payment service company, we have gotten a lot of questions about landlording over the years. One of the frequent questions is “How can I be assured that my tenants will pay me rent?” One of the best things that a landlord can do, from our experience, is to always do tenant screening.
Tenant Screening Protects Landlords
Your rental property is expensive. Before you hand over the keys to such an expensive property, wouldn’t you want to know as much as possible about the financial behavior of your renter?
Moreover, while tenant screening isn’t perfect, a high credit score statistically correlates to a high likelihood that a landlord will be paid. You can’t be a successful landlord if you are not getting paid.
Tenant Screening Can Be Easy and Free
OK. But isn’t tenant screening a hassle?
Nothing could be further from the truth. Modern tenant screening can be done without a site inspection, and the cost (roughly $40 for a complete credit check with criminal background and eviction history) can be specified to be paid by the tenant. Effectively, tenant screening is free for you as the landlord.
ClearNow recommends starting at https://clearnow.mysmartmove.com/. The process is entirely online, landlords can specify that the tenant pays, and the results come from TransUnion, one of the big 3 credit bureaus. You can get tenant screening results within minutes.