Portland property owners and their tenants aren’t restricted to existing within a traditional 12 month lease agreement all the time. Month to month leases also work well in some situations. It depends on what a tenant and an owner has planned for the future and how much flexibility they need. It also depends on tolerance for risk.
When you’re deciding whether a month to month lease is right for you, consider the financial aspects as well as the freedom you may need.
This is especially relevant to owners and tenants during the lease renewal period. We’re considering what it means and where the advantages and disadvantages can be found.
What Month to Month Leases Mean for Portland Tenants
Tenants in Portland are often wary of a month to month lease because they worry about the legal protections they may not have if they aren’t locked into a 12 month lease. However, all the general protections and benefits that apply to a longer lease term also apply to you if you have a month to month agreement. Some of those might be shorter or altered. For example, the amount of notice a landlord has to give you to vacate is potentially less than the notice period in a year-long lease.
However, the most important rental laws will still apply to you. Your landlord and property manager are still required to keep your home safe, habitable, and maintained throughout your tenancy, even if it’s on a month to month basis.
Flexibility is the biggest asset to choosing a month to month lease renewal. You can stay at the property for as long as you want as long as the landlord also agrees, and you aren't locked into an extended stay for a full year. If you’re planning to move in the next few months but you’re not exactly sure when, a month to month lease is much better for you. If you’re not sure you love where you’re living but you haven’t had the time to find a new place - this allows you to move on your own schedule.
While a month to month lease agreement will often mean a higher monthly rent than if you sign a long term lease renewal, you’re still able to stay in command of your own financial needs when you choose a temporary rental contract. Maybe you earn enough now to pay the rent but you know you won’t be working as much later on. Your month to month lease allows you to look around for cheaper housing when your finances change. You can also respond faster to any changes in the market. If rents suddenly drop, you can move on and find another home that you prefer and is now more affordable.
Why Tenants Don’t Want a Month to Month Lease
The flexibility is a huge draw. However, there are also some very good reasons that you may not want to choose a month to month lease.
One of the greatest risks for renting month to month is that your landlord can decide to end the lease term at any time. You’ll have to find new housing quickly if you receive a notice to vacate, and that can seem risky to a lot of tenants.
Even with the required notice period, you won’t have much time to pack up your house and find a new place to live. If the market is tight and demand outweighs supply, you could find additional hurdles in your search for an affordable home.
There are any number of reasons that your landlord could ask you to vacate. Perhaps they’re going to do some renovations or maybe they want to sell the property. It’s possible they’ll be moving into the home themselves. Whatever the reason, you don’t have the stability that you do in a 12 month lease renewal.
Another disadvantage is that you’ll be paying a higher rent. Typically, when you’re offered a lease renewal, you’ll be asked if you want the 12 month lease term or a month to month situation. It’s almost always more expensive to go month to month. Landlords and Portland property managers prefer knowing that they’ll have the same tenant in place for a full year. So, they’ll offer lower rental rates. Make sure your budget allows you to pay a little more in rent every month for the privilege of staying flexible.
Deciding whether to go month to month depends on your plans and your finances. Is flexibility more important to you than a lower rental amount?
Month to Month Lease Renewals: Portland Landlord Considerations
With rental protections for Portland tenants growing stronger with every new law, a lot of landlords in Portland feel like they have little control over what they can and cannot do with their rental property.
One thing you can control, however, is lease term.
When it’s time to renew the existing lease you have with your tenant, we’ll talk about the option for a month to month lease. If your tenant chooses that instead of a full 12 month lease renewal, you’re losing the stability of a year-long lease agreement. You’re facing potential turnover and vacancy costs within that year. However, there are a number of benefits for Portland rental property owners as well.
The benefit of a month to month lease is that you will have greater flexibility in controlling whether or not you keep your tenants in the rental property. You can ask them to vacate two or three months into the month to month lease term if you want. Or, you could find that those tenants are content to remain in place for nearly the full year anyway.
You’ll also have an easier time collecting higher rents on a month to month tenancy. When we offer our tenants a lease renewal, they understand that a month to month agreement will come with higher rents.
Many landlords feel that a month to month gives them some flexibility in dealing with tenants. It is especially important in states that tend to favor tenants over landlords in disputes.
We would be happy to talk about how to handle your lease renewal in Portland, and whether a 12 month lease or a month to month situation works better for you. Contact us at PropM, Inc. for more information.