How do No Lease tenants work?

I been seeing a lot of properties with no lease month-to-month (no prior/expired lease) tenants in place (for example, in a basement. What would compel a landlord to take on a no lease tenant (other than extra rent)? Do you just tell the tenant that you have a space they can live on the cheap, no credit check, no background check, LL can raise rent whenever he/she wants, and you need to leave with 30day notice? Again, this seems very common in the outer boroughs for low income families, and am curious to understand the pros and cons.