Month to Month Leases vs. Fixed-Term Leases – How Do They Work? What Are the Benefits?

Whether you’ve owned your rental property for years or it’s your first rodeo, deciding to offer your tenants a fixed-term lease or a month-to-month lease can seem like a big decision but understanding how they work and the benefits of each will help you make a more informed decision.

Fixed-Term Lease

The most common rental agreement, a fixed-term lease states that the lease is for a set duration and once the time frame is up, the tenants have the option to renew the lease for another year. Fixed-term leases are traditionally for a one-year period but 6-month and 2-3 year leases are not uncommon.


  • Guaranteed occupancy for the duration of the lease. Once a lease is signed by both the tenant and landlord, the tenant is locked into the agreement for the time period stated in the agreement. This means that as a landlord, you don’t have to worry about finding new tenants for your rental property until it gets closer to the end date.
  • Guaranteed income. Even if your tenant makes the decision to break their lease for the rental property, most leases outline the fees associated with this decision (typically, the tenant is still responsible for paying their rent on a monthly basis), ensuring guaranteed income for the property.


  • Fixed rental rate. During the lease term, the rental rate cannot be changed.
  • Set lease terms.  During the lease term, none of the terms outlined in the rental agreement cannot be changed as long as they comply with state laws. This means that no new rules, fees, or conditions can be put in place.

Month-to-Month Lease

Just as it sounds, a month-to-month lease is for a one-month period and will auto-renew at the end of the month. A month-to-month lease not only offers the tenant flexibility but also offers the landlord/management flexibility.


  • Easy to change the lease terms. With a month-to-month lease, changing the terms of the lease is easy! As long as the new terms follow state and local laws and you give your tenants proper notice, changing the pet policy, maintenance requirements or the likes can be done very easily.
  • Easy to ask a tenant to move out. If there’s an issue with your tenant or there have been changes with the rental property, it’s a simple process to give the current tenant a notice of nonrenewal. Depending on the terms outlined, there typically needs to be a 30-day notice of nonrenewal.


  • Unplanned vacancy. If you are offering your tenants a month-to-month rent and they decide not to renew their lease and give notice to move out, you could be faced with an unplanned vacancy. Finding tenants in a short period of time can be stressful, but with the help of our team at Lamacchia Property Management, we’ll make the tenant search much easier.

Security or Flexibility?

When deciding what type of lease agreement you will offer your tenants, it comes down to whether you want the security of a fixed-term lease or the flexibility of a month-to-month lease. If you would like to experience the best of both worlds, there is an option to offer your tenants a fixed-term lease for the first year and a month-to-month lease thereinafter.

Are you ready to hand the responsibilities of being a landlord off without selling your rental property? Give Lamacchia Property Management a call today to learn more about our services at (855) 213-3410.