Keeping single-family tenants locked into a year-long lease is a bad idea for the landlord. Several years ago, I made the decision to make all new leases a month-to-month agreement. A longer-term lease causes more problems than it solves. 

Nearly all of my tenants stay much longer than one year. I include the clause in each contract that the rental agreement continues month-to-month until one party gives a 30 day notice to vacate. I have tenants in the same houses for multiple years based on a month-to-month agreement. I want people to stay for years and I have turnover costs each time someone vacates, but I would rather have the flexibility of being able to end a problem lease should the need arise. Actually, I have never ended a lease from a tenant that I placed into a property. I did ask two tenants to vacate that a property manager placed, but that is a topic for another post. 

Why would we want tenants in a property that no longer works for them? Life happens, people relocate, relationships and family dynamics change. I am not going to take the time of taking a tenant to court to enforce payment of several months of rent should they need to vacate before the lease term is up. It’s too easy to just get another tenant. Early in my career, I did keep the security deposits of tenants if they left prior to the lease term. Inevitably, they wouldn’t even bother to clean the house if they knew their deposit would not be refunded. It’s better to agree to refund a major portion of the deposit if they leave the house in top condition.

Landlords need to swallow their pride on this issue. Yes, you have the added uncertainty of not knowing precisely how long tenants are going to stay. Yes, you will incur turnover costs when they leave. That’s what the system is, people come and go. Make it easy on yourself, be nimble. 

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