Apartment Renting – Should You Choose a Short-Term or Long-Term Lease?

Apartment Renting

According to Investopedia, a lease is a contract that outlines the terms and conditions under which one party agrees to rent a property or an asset owned by a second party. This lease assures the tenant that they have a right to use that asset, and guarantees the landlord or the property owner that in return, they’ll get a payment for a specific number of years, or months.

Here, we differentiate between the types of leases offered and which benefits a tenant the most.

What is a Short-Term Lease?

A short lease, more commonly known as a rental agreement is a short-term contract that spans for less than six months. Typically, short-term leases are either renewed each month, or can be of three months. Often, you’ll see an option for a short-term lease in neighborhoods that have an unequal demand and supply rate i.e. demand is high whereas supply is limited.

In simpler words, there would be more renters but not enough rental units available. To maintain revenue, landlords usually give out their unit when the rents are high. They lock in tenants with a long-term lease when the rent is declining.

What is a Long-Term Lease?

Generally, property owners prefer giving out long-term leases for apartments. Tenants who sign on to a full 12-month agreement have the guarantee that the rent sum won’t change, neither would they be in danger of being turned out of that unit.

However, when a tenant moves out of the apartment, the owner can have trouble finding a good replacement. During this time, they can lose their monthly income if the unit is not filled quickly. They must also get the unit ready for the next family or person i.e. cleaning, replacing carpets, fixing wear and tear and painting if necessary.

Nevertheless, having a long-term tenant can assure the landlord that they will receive an agreed-upon amount each month.

Which Lease is more favorable?

While the option does depend on your circumstances, most favor a long-term lease.

A long-term lease not only offers a greater security of residence, it also gets rid of the hassle of looking for a property every few months. In addition, with a long-term lease, the landlord or corporation that owns the apartment can be satisfied that their property is being taken care of, since the tenant will stay there for a longer period of time.

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