Lease vs Rental Agreement
A detailed comparison to help you choose the right option.
Lease Agreement
A fixed-term contract (typically 6-12 months) that locks in terms for both landlord and tenant for the entire period.
Advantages
- Stable rent amount for the term
- Security for both parties
- Predictable occupancy
- Harder for landlord to change terms
Disadvantages
- Less flexibility to move
- Early termination penalties
- Locked into terms even if circumstances change
- Harder to renegotiate
Rental Agreement
A short-term or month-to-month arrangement that automatically renews and can be modified with proper notice.
Advantages
- Flexibility to move with notice
- Can renegotiate terms regularly
- Good for short-term needs
- Easier to terminate
Disadvantages
- Rent can increase with notice
- Less stability
- Landlord can terminate with notice
- Less predictable costs
Key Differences
- 1Duration: Leases are fixed-term; rentals are typically month-to-month
- 2Stability: Leases provide more certainty; rentals offer more flexibility
- 3Rent changes: Lease rent is fixed; rental rent can change with notice
- 4Termination: Leases require cause or penalty; rentals just need notice
Which Should You Choose?
Choose a lease if you want stability, predictable costs, and plan to stay for the full term. Choose a rental agreement if you need flexibility, are in a transitional period, or want the ability to move with short notice.
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