Why Landlords Should Stick to Annual Lease Agreements

With a simple online renters application, a potential tenant can begin the process of entering a rental agreement. Typically this will be either a yearly lease or a month to month agreement. The year-long lease is the industry standard, as it should be since it grants more stability. It wouldn’t be entirely honest to say that there are no advantages to a by the month lease, but said advantages are almost entirely for the tenant instead of the landlord.

Tenants get the biggest break in the month to month approach because of the flexibility it gives them. Instead of being attached to a location for an entire year, the monthly approach frees tenants to move out essentially whenever they want. It also allows them to purchase very temporary housing in case they’ve moved to a new area and haven’t settled on a home yet. This is great for them, but it potentially leaves the landlord with unpredictable vacancies, which costs money. The only real perk to a landlord in this scenario is that they can also end the leasing period whenever they want. Notice, typically 30 days, must be provided, but all this does is offer a simple way for landlords to be rid of troubling tenants.

The only other advantageous point for landlords in a month by month lease mainly applies to less experienced landlords. The threat of being able to terminate a lease at any time may help them ensure tenants behave. The truth, though, is there are just too many advantages to an annual lease to pass it up. Here are a few reasons why landlords should stick to an annual lease agreement.


The annual lease provides stability for both the landlord and the tenant. They become familiar with each other, and expectations become clear. A tenant who is more invested in a property is more likely to behave and less likely to cause damage. An annual lease also keeps tenants on the property more consistently, which cuts down on vacancies and makes ones that do occur more predictable.

With a month to month lease, you’ll be switching tenants more often, and this is always a gamble. Even with proper tenant screening, it’s hard to know for sure who you’re letting on your property. Some mishaps will always be unavoidable, but switching tenants less often should minimize your risk.


The rent with an annual lease is advantageous for both the landlord and the tenant. For the landlord, this means a reliable source of income throughout the year. This predictability will make it much easier to plan for necessities like repairs, and it will also make calculating the costs of any changes, such as upgrades or expansions, much easier.

Annual rent is convenient for the tenant, as well. Month to month agreements typically have a much higher base rent than an annual lease. There’s also the risk of the landlord deciding to raise the rent. They have to provide at least a month’s notice, but this is still a concern a tenant wouldn’t face with an annual lease.

No surprises

An annual lease is a detailed contract that ensures both parties are protected and know what to expect. All policies regarding rent and any overages are plainly laid out and agreed to. As are any policies regarding pets or any other particulars. Some may think that the annual lease serves mainly to protect landlords, but this isn’t true. A lease also protects the tenant from the landlord changing policies in the middle of the year. To get back to the point about pet policy, imagine if a landlord allowed tenants to move in with pets but two months later decided pets were no longer allowed. To say this would cause some conflict is an understatement.

An annual lease is a plain agreement that minimizes risk of unpleasant surprises for all involved. There are just too many positives to not opt for it in most cases.

Steve Max
Steve Maxhttp://www.webzando.com/
A long time digital entrepreneur, Steve has been in digital marketing since 2010 and over the past decade he has built & executed innovative online strategies for leading companies in car insurance, retail shopping, professional sports and the movie & television industry.


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