The Difference Between Short-Term And Long-Term Leases
When you lease a property, you have the option of choosing between a long-term and a short- term lease. But in order for you to decide which option is better, it's important to know the advantages and disadvantages of each one.
Let's start with the short-term lease. In a nutshell, it is one where the parties are bound by a shorter lease agreement. In this sense, it offers the parties more flexibility and it is thus more suitable for people who have to change locations often. For people who work as store managers, heavy machine operators, or whose jobs require them to relocate periodically, a short-term rental may just be the thing they need.
The flexibility of the short-term lease does not however work for the benefit of the tenant alone. It also affords the landlord flexibility because it allows him to change the terms and conditions of the lease regularly. For instance, the landlord may opt to increase the amount of rental after the lease agreement expires. A short term-lease may also work to relieve the landlord of a problematic tenant.
On the downside, a short-term lease is not very common because more landlords prefer long-term ones. But perhaps the primary reason why landlords choose long-term over short-term ones may be due to the cost involved. Short-term leases prove to be more costly for the landlord because of the advertising expenses and the effort involved when the property is vacated. To compensate then for the cost of advertising the property, a lot of landlords often result to requesting for a higher security deposit.
A long-term lease agreement is one where the parties are bound to each other as landlord and tenant for a longer period. Compared to a short-term, a long-term rental offers each party more stability. Since the landlord is prohibited from increasing the rental until after the end of the agreement, it becomes more economical for the tenant to enter into this type of agreement.
On the part of the landlord, one advantage of entering into a long-term lease is the amount of turnover. There are fewer property vacancies in a long-term one and for the landlord, this means less effort and expense in terms of advertising. A landlord need not increase the security deposit in order to recuperate the expense.
Long-term lease is thus ideal for people with jobs that do not require them to relocate frequently. It is also the kind of lease agreement that's ideal for people who want to start a family of their own. Because the rent is cheaper, long-term rentals makes saving easier.
But whether you opt for a long-term or a short-term lease, make sure you completely understand the terms of the contract to prevent misunderstanding. Keep a copy of the contract for reference.
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Source by Adam Bridges
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