Living in an apartment or condo is a great way to dip your toe in home ownership. However, renting is much different than paying a mortgage. But there’s another way to pay for an apartment by leasing a home.
Often times leasing and renting are two terms that seem to be used for the same thing. However, they are very much different once you get into details.
So, which is the best option for you and your family?
Picking which way is right for you will depend on what type of living experience you are looking for.
Here is everything you need to know about the difference between leasing and renting a home.
What Are The Benefits of LEASING?
Why would someone lease a place to live knowing that it will only be temporary?
The people who are looking to lease a home as opposed to renting are often in unique situations.
These are people who know that they only need a home for a certain amount of time. Here are the benefits of leasing a home to help understand why it is such a popular option:
You Get A Furnished Home
Landlords want to be able to have a quick turn around for renting out a leased apartment. As soon as one temporary contract ends, a new one should start. Chances are bigger properties that are more well-kept already have a line-up up tenants for down the road.
So, it is important that these types of properties are fully furnished for a quicker turnaround. This is not only a perk for the landlord, but for the tenant as well.
People who are leasing due to work don’t want to travel around with a large moving truck every couple of months.
Being able to only have to take your personal belongings with you means that you can move quickly onto the next destination. This is also a great option for families needing temporary shelter so they can keep their furnishings in storage.
A Temporary Living Space
Some people need a short-term stay for different reasons. Some people travel for their work and spend a couple of months in one city before moving to the next. Other people may be looking for a temporary home while they are waiting for theirs to be repaired of building. Some people may just need a place to stay for half a year while trying to figure out their next life move.
There are many different and unique reasons why someone may need to stay in a leased home for a short time. But, the chance to only being responsible for a home for a limited time is a huge bonus.
This gives people a different option.
With traditional rental agreements, it is really hard to break that contract.
This means that if you sign a rental agreement for a year, you won’t easily be able to pick up and move when you need to before the time is up.
You may end up paying a great deal in fines and fees if you try. With a leased home, you have much more control.
This means that you set the rules and restrictions for how you want to live.
What Are The Benefits of RENTING?
Renting and leasing are similar in almost every way except for a couple. So there is really one different perk for renting an apartment.
The perk is stability.
Stability is such an important thing for people who are not looking for move around.
With leasing, you get stability, but only for a short amount of time.
Because you are able to renew your rental agreement once the time is up, you are almost always guaranteed to have a roof over your head. Knowing where you will be living for the next year and beyond is a great sense of comfort for some families.
This is the way to not only build a rental home into what you want but also build memories.
Rental homes are much more like homes that you own. You are the boss when it comes to furnishing and style and you get to dictate the terms of your stay.
RENTAL Agreements Explained
The biggest difference between renting and leasing a home is the agreements that are made between tenant and landlord.
This agreement is legally binding and is not only in place to protect the renters, but the property as well.
These contracts will have key points like payments, time limits, and rules of order.
So, what makes these two processes so different? Here is what we found out!
Rental agreements are straight forward contracts between tenant and landlord. This is a binding agreement that states that renters need to pay their rent by an agreed upon date. This document will also state certain “rules” that both the tenant and landlord have to agree to.
This contract will also state who is responsible for what. If your landlord is in charge of lawn care and snow removal, the rental agreement should reflect that.
This agreement will also reflect a certain code of conduct that the tenant must respect. This is especially true in larger apartment buildings that have several units.
What You Need To Know About RENTAL Contract Renewal
While a rental agreement is fairly straight forward, the payment and rental time are where things get interesting. A rental agreement will need to state how long that agreement is good for. Most rental agreements will run from 6 months to a year.
However, in special cases, you can see agreements that work on a monthly basis.
This means that every month new terms of the agreement must be made in order to maintain occupancy. While this is a good option for people who move around a lot, this doesn’t always protect the tenant.
This is because the landlord can change the terms of the agreement each month. Longer rental contracts mean that the original agreement is valid for the full term of the contract. Once this contract is up, the tenant can choose to remain in the home, as long as a new contract is in place.
This means, that a rental property can potentially be your only home as you are able to keep renewing your contract. Of course, this is assuming that your landlord is still willing to rent to you.
This is often the most popular option for singles and families who want to stay right where they are and are not looking to move around.
LEASING Agreements Explained
Lease agreements are fairly straight forward contracts that a tenant and a landlord will enter in together. Much like rental agreements, lease agreements will state rules and code of conduct.
Along with a behavior guideline, lease agreements will also state who is responsible for much.
Because leased homes work differently than rentals, you can expect different things from these agreements. For example, many leased homes come furnished. This means that there is already large furniture like beds, couches, dressers, and tables.
Because you are technically leasing the furniture, you will also be expected to care for it the way the owner would. With a lease agreement, you are more on the hook for keeping the home in top shape.
Furnishings and fixtures that are damaged during your short stay, will have to be paid for or replaced by you.
What You Need To Know About LEASE Contract Renewal
While everything with a lease agreement is fairly similar to rental agreements, there is one huge place where they differ. This is when it comes to renewing the lease agreement. Generally, you will not renew a lease agreement. Lease agreements, like rental agreements, have an end date. However, unlike rentals, once your lease is up, its time to move on.
Still confused? No worries – we got you!
For example, if you sign a lease agreement for 3 months, once that time is up you are no longer a resident of the home. While you may be able to extend the contract depending on your needs, it won’t always be the case.
This is because chances are the landlord already has the next tenant lined up. Leased homes are more like temporary dwellings that are lived in for a short amount of time. Think of them like “extended stay” hotels. This way you know exactly how long you are staying for and more importantly, know when to start looking for a new place.
With only small differences between renting and leasing an apartment, it is hard to tell which is best. While they are similar in so many ways, they offer two totally different experiences.
While one isn’t better than the other, one will work better depending on your situation.
If you are looking for a home to call your home for a limited stay before you move onto the next, a lease agreement would be the way to go.
People who are not ready to buy a home but want to plant some roots will be much better off with a rental home. It all comes down to what you need and want to make this place your own. Good luck.
Maria is the founder of GoDownsize. While studying architecture in Denmark she became fascinated with designing living spaces for boats, tiny houses, RVs, and other small spaces.
She mainly writes about space optimization, interior design, and downsizing. She’s also in charge of our YouTube channel. Read more about Maria here.