Pros and Cons of Short Term and Long Term Leases

One of the biggest decisions you face when apartment hunting is the lease term. The length of the lease partially depends on the available lease options, but it also depends on whether you prefer a long or short-term lease.

What is a Lease?

The document that the landlord and tenant sign that contains the terms and conditions of the occupancy of the rental property is called a lease. If you are renting an apartment with a roommate, he or she also has to sign the lease. Leases are available for the long or short term.

Short Term Leases

A short-term lease typically lasts six months or less. It could also be a month-to-month arrangement.

Pros of Short Term Leases

A short-term lease has certain advantages, which can make it a practical option.

• Flexibility

A short-term lease provides flexibility in that it allows you to experience the neighborhood and the unit.  This can be ideal if you are new to a city; you can then choose to live in multiple places in the city or change cities altogether without the pressure of having to wait several months until the lease ends. Short-term leases also make it easier to live if your job requires frequent relocation.

• Freedom

Short-term leases provide the freedom to be able to move on short notice. It can also come in handy if you’re in between homes or building a new one.

Cons of Short Term Lease

• Negatively Impacts Credit Score

Short-term leases can be damaging to your credit score if you routinely change apartments. This is large because landlords will be requesting your credit history each time you move.  Multiple inquiries drive credit scores down.

• Lack of Stability

Although short-term leases offer flexibility, they can also become a bit of a hassle. You’ll find yourself constantly packing and unpacking, apartment hunting, and going through the apartment inspection process each time your lease agreement expires.

• More Competition

Landlords want long-term tenants because it saves them time and money.  To that end, most won’t offer lease agreements for less than six months at a time, and those who do will probably charge a higher monthly rent for the unit.

Long Term Leases

A leasing term that lasts six months or more is considered a long-term lease.

Pros of Long Term Leases

• Increased Stability

A long-term lease means you don’t have to worry about renewing your lease for at least six months. This gives you an opportunity to settle into your new place and explore everything your new neighborhood has to offer.

• Ability to Customize

Some landlords allow long-term tenants the option of customizing the interior of their apartment as long as it complies with the terms and conditions of the lease.

• Affordability

Landlords like the idea of having a long-term tenant so most will offer lower rental rates or special discounts for longer lease terms.

• Builds Rental History

Becoming a long-term tenant has its perks, and one is definitely the ability to establish a rental history with your landlord. This becomes especially helpful when you need a reference for a new place or a new landlord to research your rental history.

• Less Competition

There are more available apartment units to choose from since landlords favor long-term leases.

Cons of Long Term Leases

• Maintenance Costs

Since you will be staying for a long term, you might have to get things fixed, which can be costly.

• Boredom

Some people don’t like staying in one place and live their lives constantly on the move. Long-term leases may not be ideal for this type of tenant as they may be tempted to break their lease agreement, which comes with a host of financial and legal penalties.

Conclusion

One lease is not necessarily better than the other. The lease option you choose should be based on your lifestyle and living situation. Weigh the pros and cons of both before signing on the dotted line.