When searching for a flexible housing option for workers, month-to-month leases are a great option.
When searching for a flexible housing option for workers, month-to-month leases are a great option.
Month-to-month leases allow for more control for the company to plan suitable accommodations for their workers without committing to a set amount of time.
Whether your workers are helping to put down roots in a new city or it’s a team headed out for annual training, this is what you need to know about month-to-month leases.
What Is a Month-to-month Lease?
The standard lease model can run anywhere from six months to years at a time. When the lease end date comes, renters are then able to decide whether they extend their stay.
On the other hand, there is a short-term alternative — month-to-month leases. With these, a renter and landlord agree to maintain the lease on a rolling monthly basis.
Typically, month-to-month leases are automatically renewed every month until one party decides to end the agreement.
If a renter wanted a place to live but didn’t want to commit for a long period of time, they could opt for a month-to-month lease.
Month-to-month agreements are great for those who are temporarily locating, visiting a place for an extended period of time, or as an intermediate option while searching for another long-term housing choice.
Why a Company Might Choose a Month-to-month Lease
Here are just a few scenarios in which month-to-month agreements make sense:
- Opening a new facility
- Travel training
- Shorter commutes
- Interim until an employee can find something permanent
- Need for on-call or constant availability
The Benefits and Risks of a Month-to-Month Lease
Month-to-month leases come with their own benefits, as well as detriments (in the form of risks). We’re breaking down a few to keep in mind when deciding what kind of lease your employees need.
There are a number of benefits that come with choosing a month-to-month tenancy over alternatives. A company will want to carefully decide if these benefits align with its overall goals.
1. Quick Relocation
If the needs of the business change and a living arrangement for one employee is no longer needed, the ability to terminate the lease quickly is important.
You’ll only need to give proper notice based on your lease agreement. The standard notice for a month-to-month lease is 30 days.
2. No Cancellation Penalty
Unlike a traditional lease that can have a cash penalty when it comes time to end a lease on short notice, the month-to-month lease is designed for a flexible move-out.
For unpredictable or indefinite needs, avoiding an extra charge can save a lot of money for a business. Though, keep in mind it depends on the individual landlord.
There are many short-term housing options out there, but few offer the comfort that an apartment does.
If you want to ensure your employees feel at home without committing to long-term real estate or lease options, these month-to-month leases provide the best of both worlds.
4. Stress-Free Renewals
Month-to-month leases will typically automatically roll over unless there is a change by either party.
This helps to keep things simplified so that you can focus on what matters rather than having to constantly check in and renew, though this can vary depending on the agreement.
As with any rental type, there are potential cons of a month-to-month lease that a renter will want to consider. This is especially true in the case of an employer renting on behalf of employees.
1. Uncertainty of Eviction
One stipulation of month-to-month leases is that the landlord may also be able to end the lease at will, at any time.
Because of this, a landlord could decide to end the lease, displacing an employee.
While there is usually a 30 days notice required by both parties, it can be difficult to find a new place to live with a month’s notice, even for good tenants.
2. Higher Base Rent
Oftentimes, offsetting the unpredictability of a month-to-month lease means charging a higher monthly rent price.
Businesses that are looking to house many employees at once may find rents above fair rental market values due to the short-term agreements difficult to accommodate.
3. Rent Increases
Similar to the above risk with higher base rent costs, there is also the possibility that a landlord can raise the rent they charge without any warning, month-to-month.
Given the nature of the month-to-month lease, these agreements reset every month, and there is nothing stopping a landlord from upping the rent for the next month.
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Steps for Asking for a Month-to-month Lease
If you’ve decided that a month-to-month rental agreement is right for you, it’s time to think about the application process.
There are a number of steps that a company will need to take to secure leases on behalf of employees.
1. Research Month-to-month Leases
Before making any decisions, you’ll want to carefully consider whether a month-to-month lease is right for your needs. Not only are the benefits important to understand, but also the legalities.
If your primary goal is to keep employees comfortable so that they can continue to be good employees, researching how these lease types can both hurt and help that goal is crucial.
While the flexibility for business needs might sound ideal, also consider the opposite flexibility that a landlord will have within the same agreement.
For example, if a landlord decides they want to give a 30 days notice to cancel the lease in favor of renting to someone long-term, do you have a backup plan in place?
The last thing you want to do is cling to a month-to-month lease and be subject to a landlord’s changes that can hinder the business.
2. Put Together Materials
Once you’ve decided that month-to-month leases are the best option for your employees, it’s time to piece together an application.
The application when securing a lease on behalf of the company rather than an individual is generally different.
Usually, a lease given to a company is known as a corporate lease.
Corporate leases can look different on a case-by-case basis, but they allow one entity to rent multiple units and then sub-lease to their own tenants, usually employees.
Details often required for leases on behalf of a company and its potential tenants include:
- Federal tax information
- Business formation details
- Statement of earnings
- Business references, including credit references
- Information on any sub-leaser (resident or employee) set to occupy company apartment, including background checks
- Information on other occupants if additional
- Rental history if applicable
- Credit reports
Because month-to-month leases can pose a higher risk for property managers, it can help to create an ironclad application.
Keep in mind that not every business has the same process. A company will need to check individually with every housing option they intend to apply to.
3. Organize a Meeting with the Property Manager
Setting up a meeting with property managers suitable for your employees is the perfect next step.
This step can work in conjunction with the application process. Speaking with a property manager or landlord directly is a great way to ensure that it is a good fit.
You can ask preemptive questions like the ins and outs of their own month-to-month leases, but you can also directly see what needs to be done for you to obtain one.
Speaking with leasing officials can be especially helpful if you’re looking to do large-scale leasing.
It gives both companies the opportunity to ask questions and hopefully get approval.
4. Plead Your Case
While speaking with leasing officials, do your best to express why your company wants to work with them.
For example, if the apartment location is a short commute to a new factory opening and offers the perfect solution, let them know.
It can also be a good time to make your company and employees seem like the ideal renters.
Explain how renting to you, especially a month-to-month rent meets both parties’ needs. For instance, you are able to provide your employees the short-term comfort they need, and the leaser makes above-market-value rent in return.
You might also explain that your company is committed to making the transition as smooth as possible when the time comes to begin and end the lease.
All of which can help to make sure you are successful in obtaining housing for your employees.
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Next Steps After Submitting an Application
After the application process and potentially meeting with the leasing company, you may be asking yourself what the next steps are.
If the Property Manager Says Yes…
In the event that the leasing office or landlord does approve your company’s application, there are a few things you’ll want to do.
1. Negotiate the Terms of Tenancy
Rather than blindly accepting the lease offered to you, take time to ensure it makes sense for your and your employee’s needs.
While it might be difficult to completely restructure a lease to be in your favor, you can certainly bring up any issues to the leasing party before accepting.
Common lease aspects to negotiate include the cost of the rental property, the start and end date, parking, storage, a security deposit, or even the possibility of furnished units.
2. Follow Up with the Property Manager
If the property manager is not active in discussing the process with you, make sure to set regular reminders to check in and get updates as needed.
The last thing you want to happen is move-in day comes around and the unit(s) are not ready for your employees.
3. Make Sure All Terms Are Set in Writing
A big mistake that renters make is having discussions and negotiating terms only to not have those terms put into writing.
If the terms of a lease are not put in writing, then there is no way to advocate for them.
This is especially important for large-scale rentals or when an employee will be taking over the unit to avoid things getting murky.
If the Property Manager Says No…
Applying for an apartment on behalf of an employee or to be used as a company spot can be difficult.
Simplify With a Turn-key Alternative
Travelers Haven can help you save money and energy by finding a suitable month-to-month option. The process with Travelers Haven is simple:
- Fill out an inquiry form – This includes all of the details Travelers Haven needs to get to know your company and needs.
- Provide details – Take some time to confirm your housing preferences so that Travelers Haven can do a comprehensive search, finding the results you need for your employees.
- The search & confirmation – Travelers Haven will take all of the information you’ve provided and search for options that match those unique needs. Your company can then compare the options and pick which one is best. Travelers Haven also helps to solidify the accommodations you choose!
What to Know About Ending a Month-to-month Lease
The terms for ending a month-to-month lease can vary from place to place regardless of whether its your first time or tenth.
Localities and states may have their own requirements in motion. Generally, however, you’ll need to provide a 30-day notice before vacating.
So in the case of month-to-month leases, you’ll need to let the landlord know just before a new month begins.
Month-to-month leases provide a ton of value for companies looking to keep their employees happy during temporary relocations.
If a hotel or fixed-term lease option just doesn’t make sense, month-to-month apartment leases provide a happy medium that can satisfy the needs of all parties involved.
If your company does not want the responsibility of finding apartments willing to lease on a month-to-month basis or to companies at all, you may want to turn to a professional like Travelers Haven to make the process seamless.