The type of lease a renter chooses generally dictates the duration of the rental period. Typically, renters can choose between a short-term rental that may only be for a month or so, to long-term leases that typically ensure a place to live for at least 12 months.
Short and long-term leases both offer various benefits, as well as some potential downsides. Making the right choice requires the renter to consider their current and future circumstances.
This guide aims to explore both long and short-term rental options, showcasing the pros and cons of each in an attempt to aid renters in making the best decision.
Short-Term vs. Long-Term Renting: The Basics
Before delving into the pros and cons, it’s worth defining long-term and short-term leases in order to recognize the differences between the two options.
Understanding Short-Term Leases
Short-term leases typically last no longer than 6 months at a time and could be as little as a few days in the case of vacation leases. They’re often taken out by renters requiring temporary accommodation for things like work assignments, business trips, or vacations.
A short-term lease isn’t the same as a month-to-month lease, even though there are similarities. A month-to-month lease doesn’t have a fixed end-date, with the lease automatically renewing each month until either the renter or the landlord gives notice to terminate it. Meanwhile, a short-term lease will always have a fixed end date.
Understanding Long-Term Leases
Long-term leases also have a fixed end date, but as the name implies, they tend to last much longer. In most cases, a long-term lease will be around 12 months, although they can be much longer.
The Pros and Cons of a Short-Term Lease Agreement
In the right circumstances, short-term leases offer a wealth of advantages. However, they’re not without their downsides either.
Pros
1. Fairly Flexible
When compared to a long-term lease, a short-term lease offers a lot more flexibility. For people who travel frequently, be it for work or leisure, this can be a great bonus. However, compared to month-to-month leases, a short-term lease isn’t quite as flexible, as the renter is bound by a fixed end date.
2. Fairly Stable
Continuing from the last point, what a short-term lease loses in flexibility compared to a month-to-month lease, it gains in stability, which in the right circumstances can be a tremendous advantage. With a fixed end date, renters can make solid plans around their lease, ideal for those on work assignments or business trips.
3. A Great Way To Discover a New Neighborhood
Moving into a new neighborhood or city is always something of a gamble. Until living there, renters can never truly know if a particular location is a good fit. With a long-term lease, this can leave renters locked into renting in a place they don’t like. However, short-term rentals offer the chance to get an idea of what life can be like, without committing long-term. So, if things don’t work out, it’s easier to move elsewhere.
4. Ideal for Moving With the Seasons
In an age where more and more jobs can be carried out fully remotely, it’s easier than ever for renters to pick and choose where they live. For those who crave year round sunshine or eternal winter, short-term rentals make it easier to move with the seasons to take advantage of the weather they love.
Cons
1. More Expensive Than Long-Term Rentals
To offset the landlord’s additional costs in more frequently finding new tenants, short-term rentals typically have higher rents compared to long-term leases. On top of that, the cost of regularly packing up and moving elsewhere also adds up, making it a more expensive option in most cases.
2. Not as Stable as a Long-Term Lease
While offering more stability than a month-to-month lease, short-term leases struggle to compete with long-term rentals when it comes to providing peace of mind and security. Frequently moving can disrupt work and personal life alike.
3. Less Sense of Community
Short-term renters may feel they’re always the visitor and never a fully fledged member of the community. For many, this isn’t a problem, but renters should consider if this would have a negative impact in the long run, particularly if they have children.
The Pros and Cons of a Long-Term Lease Agreement
Renters looking for a greater sense of stability and belonging may well benefit from taking out a long-term lease. However, they also have downsides to be aware of.
Pros
1. The Most Stable Option
Once a long-term lease has been signed, renters don’t need to worry about moving again until it expires, which could be up to two years away. This is ideal for renters who need to plan for things like school and work commitments. Long-term rentals also provide more financial stability, with clear expectations of what to pay in rent and bills for many months to come.
2. Avoids Fluctuations in the Rental Market
Once the lease is signed, long-term renters know that their rent is locked in for the duration of the lease. This protects them against fluctuations in the market, avoiding rent spikes which can be common in the most desirable locations.
3. Easier To Build a Landlord/Renter Relationship
A positive landlord/renter relationship is beneficial for everyone, and with a long-term lease, renters are much more likely to get to know their landlord. This often results in easier communication and cooperation, helping renters to negotiate great terms if they plan to renew their lease or make light renovation requests. For example, a long-term renter is more likely to get the green light for hanging pictures or redecorating than a short-term renter.
4. A Greater Sense of Permanence
By staying in one place for a longer time, renters tend to find it easier to integrate into the community. It makes the rental feel more like a home, which isn’t often the case with short-term leases.
Cons
1. The Least Flexible Option
Once signed, the lease is legally binding, and breaking the terms by moving out before the lease terminates will typically come at a cost. This can cause financial strain if the renter needs to move for work, illness, or any other reason.
2. It’s a Gamble
Moving into a new area means facing several unknowns, from new neighbors to whether the area offers all the right amenities. With a long-term rental, if things aren’t quite as expected, the renter may be stuck in a less-than-ideal situation. For example, bad neighbors or a bad landlord can both have a huge impact on the renter’s quality of life, while underestimating how long it takes to commute each day can lead to spending less time with the family. The longer the lease, the longer they’ll have to put up with the situation.
How To Choose Between a Short-Term and Long-Term Lease
Ultimately, the choice between a short-term and a long-term lease comes down to the circumstances of the renter.
Those who desire flexibility above anything else will certainly benefit from a short-term lease. Remote workers, business trippers, and sun seekers can all gain a lot from a short-term lease, but it’s also a handy option for anyone who wants to experience life in a new area before committing to a long-term lease.
Meanwhile, a long-term lease may sound like a trap to the aforementioned categories, but for families or those seeking stability to pursue professional goals, the numerous benefits are likely to outweigh any potential downsides.
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