Short-Term Lease or Long-Term Lease: Which is Right for You?
Applying for an apartment and considering a short-term lease? Everyone needs a little flexibility in their lives, and committing to a 12-month lease isn’t always ideal. Whether you’re just trying out a new city or need a short-term arrangement, there are other options than the traditional year-long lease. A short-term lease could offer a solution but requires an understanding of the pros and cons.
Not sure where to start? Find out whether renting an apartment on a short-term lease may be best for you.
What is a Lease?
Before you move into an apartment, you'll be prompted to sign a lease.
A lease is a contract between the renter and the landlord.
If you have a roommate, they'll also sign the same lease. But before you sign the lease, you'll need to know if you are looking for a short-term or long-term lease agreement. This will reduce your options, as not all apartments offer both choices.
What is a Short-Term Lease?
A short-term lease is a lease that is typically less than six months. They range in duration from month-to-month to three months to six months.
Short-term leases may have the flexibility you desire but come with a heavier price tag. Here's what you need to know about short-term leases.
What are the Pros of Short-Term Leases?
Short-term leases come with a few benefits. You may find them more convenient and conducive to your lifestyle.
Flexibility is the main draw to a short-term lease for renters looking for month-to-month accommodations or a term of six months. A short-term lease allows flexibility to take a new position at work, try out a new city, or change up your living situation when you want more privacy. These leases are perfect for students because of their short-term nature. They allow students to intern in a new place or live off-campus for a semester.
Doesn’t Break the Bank
Short-term leases allow renters to pay on shorter-terms. You don’t have to commit to a year-long payment. Therefore, if you’re unaware of how your financial situation may change, short-term leases may be for you. They give renters financial flexibility that long-term leases can’t provide.
What are the Cons of Short-Term Leases?
Although short-term leases have their advantages, they also have their disadvantages. These come with the nature of the lease only lasting a few months.
Can Affect Your Credit
When you apply for a lease, your landlord might run a credit report on you to check your credit history. If your landlord conducts this as a “hard” credit pull, this can negatively impact your credit score. This is because credit inquires are one of the factors that make up your credit score.
Lack of Stability
Renters may enjoy the flexibility of a lease, but the downsides are the lack of stability for the landlord and tenant. Without a long-term tenant, landlords face looming turnover costs and sudden vacancies. You also risk needing to pack up and move again, even if you intended to resign your short-term lease.
Short-term leases may also prove more competitive. Apartment complexes almost always prioritize long-term leases in a healthy real estate market where they can pick and choose their tenants.
Potential for Legal Headaches
Vacation rental sites have made it easier than ever to rent out an apartment, condo, or entire home to turn a quick profit. Although many can offer an ideal short-term lease situation, others could put you in the middle of legal trouble. Some cities have new ordinances that are restricting short-term rentals or making them illegal. You could be left scrambling to find new accommodations without notice.
Expensive Rental Rates
Monthly rates on a short-term lease are almost always higher than a traditional lease. There is more risk involved with a landlord, and higher administration fees to show the apartment and get it ready for a new renter.
However, if you strictly need flexibility, the rent hike for a short-term lease is probably worth it. You could use the added cost and apply it to a nicer apartment with a year-long lease instead.
Fewer Apartment Options
Finding short-term accommodations is a lot of legwork to move in for a brief amount of time. They’re often difficult to find and are often available as generic, corporate apartments. You’re less likely to enjoy settling into your new home and customize it the way you want before it’s time to pack up and move all over again. Landlords are also less willing to allow for painting the walls or hanging photos during a short-term lease.
What is a Long Term Lease?
A long-term lease is any lease over 6 months. It won't give you the flexibility of a short-term lease. but offers plenty of benefits.
What are the Pros of Long-Term Leases?
Long-term leases are pretty popular. They come with built-in stability and are more commonly listed than their short-term counterpart.
Locked-in Long Term
Locking into a long-term lease avoids rent increases and comes with its own flexibility. You’re free to customize your apartment, per the terms of your lease, and make it feel more like home. You also don’t need to worry about moving again in just a few months and starting the apartment search all over again. It’s true breaking a lease is expensive, but it’s not impossible to do without a penalty.
Rental Rates are More Affordable
Traditional, year-long leases are almost always more affordable than short-term leases. You also build up more credibility and trust with your landlord, which could make for easy lease renewal and less chance for a rent hike at the end of the lease term.
Easier to Find
Long-term leases are plentiful, especially in cities with multiple apartment complexes and dynamic neighborhoods. It’s easy to find an apartment with the layout you want, from a studio to a three-bedroom when you’re open to a long-term lease.
What are the Cons of Long-Term Leases?
Long-term leases have their pluses, but there are a few reasons that may prevent you from signing a long-term lease agreement.
Might Feel Stuck
Long-term leases provide you with the security that you’ll have a home for at least six months. In a long-term lease, you could find yourself feeling stuck without meaning to.
Breaking Your Lease Might Have Consequences
If you want to move to a new location before your lease ends, you’ll have to break your contract. This entails negotiating with your landlord and you may be penalized with a contractural fine.
Read more about breaking a lease without penalty.
A long or short-term lease isn’t necessarily better than the other leases. It is really contingent on your needs and preferences. Despite the added costs, a month-to-month lease is probably worth the legwork to hunt one down if you place a high value on flexibility.
Ready to start looking for your perfect home? Apartment List can help you find the perfect apartment for a short-term or long-term living situation. Just get started with the quiz above!