Pros & Cons: Month vs Year Leases

As a landlord, one of the key decisions you’ll have to make when renting out your property is whether to offer a one-year lease or a month-to-month lease. Both options have their advantages and disadvantages, and understanding these can help you make an informed decision that best suits your needs.  

In this article, we’ll explore the pros and cons of each option. 

1 Year Lease:

Here are the advantages and disadvantages of this option: 


  • Stable Rental Income: A one-year lease ensures a steady rental income for the duration of the lease. This can be reassuring for landlords who rely on rental income to cover expenses. 
  • Predictable Tenant Turnover: With a one-year lease, landlords can anticipate when tenants are likely to move out, allowing them to plan accordingly and start advertising the property in advance. 


  • Limited Flexibility: A one-year lease is binding for the entire year, so if the landlord needs to make any changes to the lease, such as rent increases or adjustments to the lease terms, they must wait until the end of the lease term. 
  • Potential for Bad Tenants: If a landlord signs a one-year lease with a tenant who turns out to be problematic, they may be stuck with that tenant for the entire year, unless they can prove a breach of contract. 

Month-to-Month Lease:

A month-to-month lease is a rental agreement that lasts for one month and automatically renews every month until either the landlord or the tenant terminates the agreement. 


  • More Flexibility: A month-to-month lease allows landlords to adjust the rent or the lease terms more frequently, which can be beneficial in a rapidly changing market. 
  • Slightly Easier to Evict Problematic Tenants: If a tenant becomes problematic or violates the lease terms, the landlord can sometimes terminate the lease with a shorter notice period than with a one-year lease. 


  • Unstable Rental Income: With a month-to-month lease, rental income is less stable since tenants can move out at any time, which can be stressful for landlords who rely on rental income to cover expenses. 
  • Frequent Inspections: Since the lease term is shorter, landlords may need to conduct turnover inspections more frequently to ensure that the property is being properly maintained. 
  • Constantly Finding New Tenants: With a month-to-month lease, landlords may have to find new tenants more frequently than with a one-year lease, which can be time-consuming and costly. 

In conclusion, both one-year leases and month-to-month leases have their advantages and disadvantages. Ultimately, the decision to offer one over the other will depend on the landlord’s priorities and circumstances. If stability and predictability are the top priorities, a one-year lease may be the best option. However, if flexibility and the ability to quickly respond to changes in the rental market are more important, a month-to-month lease may be the way to go.