36.6 percent of people in America rent their homes. The amount of people who rent has steadily risen since the late 1990s.
Renting can be a very different experience from one place to the next. However, one thing you’ll always have to do is sign a lease agreement or a rental agreement.
What is the difference between a lease and a rental agreement? Keep reading to learn all of the differences of a lease vs rental agreement.
Lease vs Rental Agreement: What are They?
To understand the differences of rental vs lease agreements, you need to know exactly what each of them is. No matter where you rent, you’ll have to sign one of the two.
A rental agreement is a short-term contract that lists the specific rules and regulations for the renter and the landlord. Both parties must agree on these terms while the tenant lives in the rental property.
A lease agreement is a long-term contract listing the terms in which renters and landlords must follow. The tenants and landlords must adhere to the rules of the lease for the duration of the rental period.
These rules in both rental and lease agreements can include many circumstances regarding everything from having pets to the agreed-upon amount of rent that needs to be paid. Rental agreements and leases are beneficial for both the renters and the landlords, as each party has a standard to uphold.
The Difference Between Leases and Rental Agreements
The main difference between a lease and a rental agreement is the length of time they cover. A lease covers a longer period, normally in 6 month or year-long increments.
The length of a lease can be a good or bad thing, depending on your situation. The security of knowing you’ll be able to live in one place for a year is something that appeals to some.
However, if you don’t have a sure way of steady income, a lease might be daunting. Even though you know rent won’t increase, you are legally obligated to pay the full rent until your lease is over.
If you know you need to live in one place for your job, a lease is perfect. However, you are stuck with the property you’ve chosen, no matter how much you grow to dislike it, as long as the landlord holds up their end of the lease.
With a rental agreement, the agreed-upon terms last for a shorter period. Rental agreements are usually signed month-to-month by the landlord and tenant.
There are some pros and cons to the length of a rental agreement as well. If you aren’t sure whether or not you’ll enjoy living in a place, a short-term rental agreement is perfect for you. It’s also convenient to be able to re-negotiate rent prices if you have a fluctuating flow of income.
While the flexibility is great for some, others may not like the ambiguity. A landlord has every right to refuse the renewal of a rental agreement after the period is over as long as they give 30 days’ notice.
New Lease on Life
Now you’re aware of the differences of a lease vs rental agreement. It’s time to decide which is best for your needs and find a property that can provide it for you.