There are two options that a tenant and landlord can choose between when the rental lease term approaches a close: renewing the lease or entering a month-to-month agreement.
So, what do you do? Sign it? Ask your parents? Look for a new place?
Well, signing a new lease for a year or renting month to month after your lease ends both have their own pros and cons, so you should get to know both as well as you can.
Here are a few things to remember.
Usually, if the tenant and landlord can’t come to an agreement by the end of the term, then they automatically enter a month-to-month agreement.
Some advantages of being in a month-to-month is that it offers greater flexibility for the tenant to look for another home while still having a place to stay.
This is the main appeal of short-term rental sites such as Airbnb where people can choose how long they want to stay.
With how competitive real estate is all across the country — from Chicago apartments, to Toronto real estate, to Vancouver real estate or Seattle homes — a month-to-month agreement is the best option for new homebuyers looking to be in the city but have yet to find a long-term place.
The main disadvantage of having a month-to-month agreement is that for most tenants, they have to give the landlord a 60-day notice once they are ready to leave.
Landlords also have the option to charge a premium on month-to-month or short-term rentals as they see fit, provided that it doesn’t violate the residential tenancies act.
The lease agreement offers significant security in exchange for flexibility—tenants can negotiate long-term agreements and don’t have to worry about a rent increase during that entire period.
Those who are interested in staying in the same place for an extended period will find that the lease agreement is the better option of the two.
Disadvantages of having a lease agreement is that those who sign them are locked in for the time period that they agreed to with no easy way to get out of the agreement. This means that whether or not they live in the unit, the tenant on the lease is responsible for the rent.
Your Next Place
Either way you decide to go, make sure you full understand the basics of each agreement and be sure to consult the experts when you’re searching for your next apartment or condo.
If you have any additional questions, you can always take a look at our complete guide to renter questions. From what you should pay, how you should pay it, to what type of relationship you should have with your landlord; all of your questions will be answered here.