Previously, I refused to do M2M because of the seasonal nature of rentals, the market is dead between October and April. After recent discussions here, I have found another good reason M2M puts the landlord at a disadvantage.

M2M puts the tenant in the driver's seat as to when they move out. If they buy a house, they can easily time their notice with their closing. Same thing for any other reason . They can literally move at a moment's notice without incurring Costs other than moving.

If they are on a yearly lease, they have exactly one date each year to move. They have to pay ELT to move at another time. This increases Transaction Cost for the tenant so dissuade them from moving, or if they must move, it compensates you the landlord.

WRONG!

If on a year lease and they don't pay you can't evict-- as shown by those housing people for 10 to 18 months so far.

And the part about "just move out" -- don't know of any state that allows -- just pick up and leave. Proper notice- usually 30 days from when the rent is normally paid be given.

When you have a m2m you can terminate the m2m by giving notice-- and when they don't move you now have a legit reason to evict-- "tenant holding over". YOU CAN"T evict for no rent!!!

If you think you can't evict for non-payment of rent, why do you think you'd be able to evict for end of tenancy?

Even before the pandemic, I upped my credit requirements to 720 fico, among a host of other requirements. I stay off the radar by only calling prospects, and not telling them which property is mine. Only qualified people get to even see the house .

I think if you are renting M2M to people because you think there's a chance they won't pay the rent, you've already lost.

"Get your property's spread out with timing that's good for you. Easy months to rent or when you usually take vacation or use holidays."

MI holding over is a legit reason to evict-- aka I need my house back.

Second I don't offer m2m to those just signing up. I get a 2 to 3k deposit and all are good income wise and credit wise-- with past rental history. I'm talking renewing leases.

So no I would not offer m2m to a new tenant.

myob ... that makes even less sense . WHy would you be more stringent on a tenant that has been with you for a year than a new tenant? If anything , a brand spanking new tenant that you have no experience with should be a higher risk than an existing tenant. That is, m2m a new tenant !!

As for holding over, yes it is a reason to evict but the notice periods are different and the paperwork is different.

Well let me explain the not so obvious. Tenants that have been in property's awhile start getting the entitlement phase. We also charge more for m2m renewals.

New tenants are like new baby's. All nice and cuddly with goo-goo and gaga--- until they S***** on you. Then the honeymoon's over.....

sorry myob. I have only noticed the opposite. Tenants that are good and don't complain in their first year, they stay good and don't complain later on.

The ones that do complain tend to do so immediately after they move in and you have to beat them down and show who's boss.

Yearly lease doesn't stop you from raising rent or tenants moving out. It only keeps it from happening on the tenant's schedule. I don't care if a tenant stays for a one year or five years. I do want to get that ELT when they do move out.

David,

I do leases for the first year, and I screen well and will keep a unit vacant for months if needed. NY has become very hard to operate. Even w mtm I would have to give extended vacate notice depending on how many years they are in place, up to 90 days.

That said, I think mtm to start is a valid concept, and suitable for lls who will never see a prospect w a 720 score. Certainly not in my C rentals.

I currently am evicting for nonrenewal and received a money judgement. As for the moratorium the questioner had to be completed. Both working, no hardship so I won.

David and myob:

You do realize, don't you, that you may BOTH be right!

My take .......where is ELT fees are easy and nearly free money, I should not plan on it as one of my profit centers.

If you fear vacancies during a slow season, is there anything out there that prevents you from writing a five month lease?

From experience, I have found the good months to fill a vacancy are in the summer so my leases are staggered to end May 1, June 1 , July 1 and August 1. I have a couple houses I plan to renovate the kitchen so their leases end March 1 so it is May when the renovation is done.

Yes, they can give 30 day notice and move. But I can also give 30 day notice to get them out if I don't like them.

They behave better if all I have to do is give them a 30 day notice to get them out.

Most of my month to month tenants have stayed about the same amount of time as the lease tenants.

My feelings are the same as Oregon Woodstock.

In my state the beginning of the tenancy must be a lease over six months to avoid extra tax charges/collection but can revert to month to month thereafter.

I have tended to keep my tenants month-to-month to give us both maximum flexibility since I have the mindset of selling.

For those I still offer annual leases to they do come with an early termination fee and are all designed to end when I prefer them to. If they terminate early and interfere with my plans/schedule …we’ll at least o have the early termination fee.

All my tenants are long term but I understand MYOB’s mindset to some extent as well. There are benefits to having more frequent turnovers and you are certainly better able to keep up with the fast rising rent rates that is harder to do with long term tenants.

All my units are way below market value now even with small increases year to year. Then again raises in my area are up 43% in the past two years alone so now I have a conundrum and will have to raise them more substantially this year.

+1 to Oregon Woodsmoke. Month to month only. The world is so volatile now I don't want to be stuck with a problem tenant any longer than I have to.

In one particular case, I had a m2m tenant who was developmentally disabled. She would bring homeless guys to the cottage because she wanted a boyfriend. Of course, they wouldn't leave. She got 2 warnings, and by the 3rd incident that m2m lease was my best, best friend.

With my tenant developmentally disabled, I didn't want to open the eviction can of worms. I gave her a 60-day notice as required by law and grit my teeth during the count-down, letting her know that if she brought someone else home I'd have the police there to remove trespassers and she'd receive a 3-day notice to vacate. If she'd had a year lease, I can't imagine the nightmare.

if you are doing M2M because you don't want to be stuck with a problematic tenant, that horse has already left the barn.

The time to figure out if a tenant will be problematic is during the screening process, and even during the period between application approval and lease signing. You see how they react to requests like utilities turnon and renters ins.

don't open that barn door if you have any doubts....

Pmh I guess i'm just the odd ball?

Even the grocery store has an expiration date on items.

MYOB,

Yes, you are an oddball- or rather your approach is different than most. It definitely doesn’t make you wrong, just a different business model which definitely has some pluses.

You don’t let them stay long enough for the places to become filthy, require complete paint jobs or major remodels, have deferred maintenance to attend to or who fall below market in rent amounts.

You do have the hassle of having the potential for lost rent during turnover, and dealing with new unknown tenants.

Painting- if you keep the same paint color on every property, all you gotta do is quick rolling on the walls. No cutting in or taping.

Jason, if you rent M2M to a tenant because you worry they will be a problem, that's a sign you shouldn't rent to them in the first place.

I require 720fico, $5000/month. No evictions , no Bk, no collections. Forget the pandemic, since starting rentals almost a decade ago, I have never evicted a single tenant , and only filed eviction once resulting in move out with consent judgement.

David, while what you said is true my experience says extra caution is never a bad thing.

I have had the perfect tenant, professional, high income, excellent credit….turn out to be a hoarder. So niw even for the best applicants I’ve added the in-home visit because you just never know.

All my tenants are long term now but I’ve started only offering MTM upon renewal/original lease expiration because while I too screen well and have no issues due to Covid….you never know.

After 30+ years of good screening I’ve had very little problems but there have been the rare occasions where a previously wonderful tenant goes bad, turns on you etc….

Rare, but possible and with this government overreach, why take more chances than you need to.

MTM...no exceptions. never, none. a lease is an "Estate for Years" which equates to ownership interest. you want a partner? go ahead and grant that lease. when tenants ask me "why only MTM"? i tell 'em straight out "if you turn out to be a PITA i can toss you easier". those who demand a lease can seek housing elsewhere. i do not give ownership in any level in my units.

In highly regulated states (ie NY where it is illegal to ask about eviction history - LOL), MTM is much better. You are not in the driver's seat, but at least you are not married for life.

My old lease used to charge higher security deposits for pets but now, state says you cannot take more than one month's security deposit for any reason.

My old lease was 3rd day of month, rent was late. State stipulates can't charge late fee until day 5.

Anything that was in my lease that was useful is now outlawed, hence, everyone is now MTM.

If you are doing m2m instead of yearly lease, maybe reconsider if you should be renting to that person in the first place....