Short-Term Lease vs. Long-Term Lease: Which is Right for You?
One of the most important things you should consider when looking for an apartment rental is the duration of the offered lease. Obviously, you’ll need a lease that will cover the whole amount of time that you’re planning to rent an apartment, but that doesn’t always mean that a standard lease (i.e., 12 months) is a good fit.
You’ll have to decide between a short-term lease and a long-term lease. Which is better for you? What are the pros and cons of each?
Let’s find out!
What is a Lease?
A lease is a legally binding document that outlines the rental agreement between you and your landlord. A lease will give you specific information regarding the agreement, including the duration of your stay, the amenities included in your rental, and the responsibilities you have as a renter.
The lease will also spell out all the essential terms and conditions you will need to know as a renter, such as deposits, pet policies, and consequences for breach of contract.
What is a Short-term Lease?
A short-term lease is any kind of lease that is shorter than the standard term of 12 months. Typically, landlords will offer 3-month or 6-month leases, but short-term leases can even be as short as a month-to-month lease or even a weekly lease.
Pros of a Short-term Lease
The most attractive feature of a short-term lease is flexibility. You will have the option of “trying out” a new living situation without too much commitment. If you want to try living in a new city but you’re not sure if the lifestyle is a fit for you, a short-term lease allows you to dip your toes into the water before you take the plunge, so to speak.
Easier to Fit into a Budget
Short-term leases mean you won’t need to commit to a long payment period for a certain apartment. If you’re unsure about your financial situation, short-term leases are a great option that won’t break the bank.
Since short-term leases typically have a quick turnover rate, they typically come fully furnished so that they are more attractive to renters. Most of the time, apartments that allow for short-term leases are ready for the renter to move into. You won’t need to worry about buying any furniture or appliances!
Cons of a Short-term Lease
Lack of Stability
The flexibility of short-term leases is often a double-edged sword; they’re not as stable as a long-term lease. The landlord can decide to end your lease early as long as they give you appropriate notice to vacate (which is usually around 30 days). It can be frustrating to get a termination notice regarding your lease, especially if you had plans to renew or lengthen your lease.
Hard to Find
Since short-term leases often have high risks for landlords because of sudden vacancies and high turnover costs, it can be difficult to find an apartment that offers these leases. This is especially true in bigger cities since many have ordinances that ban short-term rentals. In NYC, for example, it is illegal to rent an apartment for fewer than 30 days.
To help offset the costs and mitigate the risks of short-term leases, landlords will often charge a higher monthly rent for an apartment. What’s more, you’ll also have to factor in moving charges in case your lease gets terminated early.
Limited Apartment Options
It can be hard to find different options for short-term leases. In big cities, short-term rentals are often for smaller apartments such as studio, micro, or junior-1 apartments. If you do find larger apartments such as 2-bedrooms that allow for short-term leases, they often come with a premium price tag since these are usually converted into vacation rentals.
Less Opportunity to Customize the Apartment
You will generally not be allowed to customize the apartment in any significant way since you will only be renting it for a short period of time. You can probably do small cosmetic changes here and there such as hanging up decor or putting in a rug, as long as these changes move out when you do.
Who is a Short-term Lease Best Suited For?
Short-term leases are best suited for you if:
- You’re relocating for a job
- You’re traveling for business or leisure, and you need temporary accommodations
- You’re studying or working on a short-term or medium-term visa
- You’re renovating your main residence
- You’re awaiting the completion of a sale for your main residence
What is a Long-Term Lease?
A long-term lease is a rental agreement that is valid for at least 12 months. These days, people who are looking to stay for an extended period of time in a certain location can even opt for longer than the standard 12-month lease.
Pros of a Long-term Lease
If you’re looking to lay down roots in a certain area and you don’t want to worry about your living situation, a long-term lease is for you. You’ll have peace of mind knowing that your rights as a tenant are protected. You will also have the chance to invest in your community, build a family, or focus on your career without worrying about your home.
Allows for long-term financial planning
Under a long-term lease, you’ll be able to budget better. You’ll know exactly how much you’ll spend on your rent and utilities per month, and you can adjust accordingly.
Landlords often give perks and incentives to renters that apply for long-term leases. Typically, it comes in the form of one month’s free rent. If you applied for a lease that’s longer than one year, you’ll be able to enjoy these perks for the entire duration of your lease.
It is much easier to find rental properties if you’re planning to get a long-term lease. You will pretty much have your pick of apartments, whether you’re looking for a 1-bedroom or a penthouse.
Cons of a Long-term Lease
Since you will be living in the apartment for at least 12 months, you’ll probably have longer negotiations with the landlord to ensure that you get the best deal. You’ll have to go over everything, from utilities, to what amenities are included, to your duties as a tenant.
Generally, you will be responsible for the upkeep and maintenance of the apartment. You’ll have to cover the costs for wear and tear, as well as be responsible for reporting any problems with the unit. Make sure to go over the rental agreement to see what else falls under your responsibility as a tenant.
Harsher Penalties for Breach of Contract
The penalties for early termination of your contract can range from financial penalties to civil lawsuits. Unless you have a good reason for breaking your lease early, it might be better to just bear down and wait it out.
Who is a Long-term Lease Best Suited For?
A long-term lease is best for you if:
- You’re looking to start a family
- Your job becomes permanent
- You dislike moving or changing homes
- You value security and stability
Can I Change the Duration Terms of my Lease?
Yes, you can change the length of your lease after the original one expires or comes close to expiring. If you have a short-term lease and you want to change it to a long-term, your landlord will often accommodate you because it means they won’t need to find new tenants.
On the flip side, if you need to stay a few more months after your long-term lease is up, you can also negotiate with your landlord. If you have a good relationship with your landlord, there is a good chance that he or she will agree. It never hurts to stay on your landlord’s good side!