Compare Renting Month-to-Month Versus a Long Term Lease

Once you’ve decided on an apartment to rent, you’ll have to consider the terms of the lease. Depending on where you live, you may have an opportunity to choose to rent month-to-month as opposed to the more typical one- or two-year rental period. When offered this option, some renters may choose to forgo the commitment of a year-long, or longer, lease and move forward with a month-to-month rental agreement instead. 

Would longer-term or month-to-month renting be better for your situation? Here’s a comparison of the two to help you decide.

A month-to-month agreement offers more flexibility — on both sides. In a long-term lease, the rent amount generally cannot be raised as long as the original contract is held. A month-to-month lease, however, typically allows the landlord the ability to raise the rent more easily and more often, or to inform the tenant that the lease is not renewed, likely in favor of renting the unit instead to a tenant who wishes to make a longer-term commitment.

A month-to-month agreement, on the other hand, also gives the renter the opportunity to leave an apartment more quickly rather than have to stay or pay the penalty for breaking the lease.

Month-to-month agreements may be more expensive. It’s to the landlord’s advantage to have a renter commit to a longer tenancy. In exchange for giving up the security of a greater length of time, the landlord likely may charge a higher monthly rent for a shorter-term lease or month-to-month agreement.

Different laws cover month-to-month agreements and leases. Usually in a long-term lease, a clause will specify how much notice the landlord or the tenant has to give before terminating the contract (60 days is common). In a month-to-month agreement, the notification time is usually shorter. It is a good idea to be aware of your state’s provisions governing month-to-month rentals.

If you think you might need to move in a hurry, a month-to-month agreement might be more flexible for you. Be aware, however, that you might also be required to move quickly if the landlord decides not to continue the month-to-month agreement.

Landlords might not offer month-to-month agreements. Some landlords and apartment communities don’t want to offer short-term contracts, opting for longer-term commitments. After all, it is expensive to advertise and fix up a unit after a tenant vacates it. This is especially true in areas where apartments are in high demand: if you’re not willing to sign a long-term lease, the odds are better that another renter will. If you know you’ll only need an apartment for a short time only, you might want to look for agencies that specialize in short-term rental situations.

In short, a month-to-month rental agreement offers you more flexiblity, as you could leave the apartment more quickly. But a longer-term lease offers more stability, and often at a lower monthly rental price. Choosing the option that is better for you depends on your housing needs and expectations for the year or two to come.