Living in an apartment on a month-to-month basis can seem very alluring — especially for travelers who don’t want to be tied down to a specific location, young workers who are unsure of where their futures will take them, and people who are new to a city. And while there are many benefits that come with this type of freedom, there are unfortunately also many downsides to non-restrictive leases — ones that probably won’t show up in the fine print of your agreement.
If your landlord or apartment manager has given you the option to sign a month-to-month contract, it’s important to understand the ups and downs of it. Here’s a rundown of the positive and negative aspects of a month-to-month apartment lease:
Pro: Ultimate Freedom
If you sign a month-to-month apartment lease, you’ll never be locked into anything bigger than a 30-day financial commitment to your residence. This eliminates the need for tenants to wait for their 12-month (or longer) lease to end in order to move. It also means that tenants will never have to break their lease if they need to move suddenly. Typically, tenants who live on month-to-month leases have the freedom to leave at the drop of a hat (so long as they pay the full month’s rent upfront, of course). If you decide you don’t like your apartment, all you have to do is give your apartment manager advance notice (usually between two weeks and 30 days) of your move-out date. Therefore, the longest amount of time a tenant would have to remain in the apartment after deciding to leave would be a month.
The freedom to move whenever necessary is especially ideal for students and/or individuals that travel frequently. For both of these groups, a month-to-month lease can provide the flexibility needed for their busy lifestyles.
Pro: Easily Converted Into a Long-Term Lease
Another benefit of a month-to-month lease is that should you decide you wish to stay in the area longer than originally anticipated, you can easily convert it into a long-term contract. Because it gives your apartment complex added security, most landlords will happily agree to the change. An added benefit to this comes in the money you’ll save by locking in your current rent price for a whole year (or more).
Pro: Fully Furnished Apartments
In large cities and “college towns,” it’s quite common to find apartment complexes that are specifically intended for short-term leases. These complexes usually design their dwellings for individuals who move frequently and/or who are students and don’t intend on staying in one place for an extended period of time. As Zillow points out: “Some apartments are specifically designed for short-term renters and come furnished. Residential buildings near universities, for instance, are ideal for summer interns, who are often willing to pay more since they don’t have their own furniture.”
Con: Increased Cost
Because a tenant can leave at any time when they’re living month to month, most landlords protect themselves by charging more upfront via higher security deposits. On top of that, monthly rent for these leases can be hundreds of dollars more per month than it would be if you were to get an annual lease on the same apartment. Rent is more expensive in these cases because it protects the apartment manager from unexpected costs, which might be incurred from having to repaint, re-carpet, advertise, and re-lease the unit. Plus, it covers any fees the landlord might owe to the realtor or apartment-finder who may have helped the new tenants find their complex.
Even if you find a month-to-month apartment lease that isn’t more expensive than an annual one, there is usually nothing in the contract to prevent the landlord from raising the rent each month. This is an especially common occurrence in cities that are rapidly growing like Austin, San Francisco, Seattle, and Portland, where the pressure caused by the increase in population drives up the cost of living. That means that over time, the apartment could even become too expensive for your existing budget, forcing you to move out much sooner than expected.
In the words of the legal advisors at RocketLawyer: “One of the greatest risks for the month-to-month lease is the ever-present option for termination… In many states, that ability comes because he can change the price with each month. He or she cannot do this unilaterally. You have to sign the new agreement, but if you choose not to sign the new agreement, you will have to end the tenancy yourself. Fixed-term leases, on the other hand, lock down that price for certain over the lease period.”
Con: Lack of Security
Even if you want to live on a month to month basis indefinitely, there is no guarantee that your landlord will want the same thing. The longer the lease, the more security is gained by both the apartment complex and the tenants in it. Because there’s not a contract requiring the landlord to continue leasing the apartment to you, he/she may decide to refuse your lease renewal at any time. Just as you can leave the apartment after giving 30 days notice, your landlord may likewise force you to vacate the premises — but with as little as seven days notice. The requirements for this type of lease termination varies from state to state, so it’s important to check with your local housing authority to see what laws your state has in place to protect against this type of eventuality.