What’s The Difference Between Leasing and Renting?
The main difference between renting and leasing is the length of the contract. Renting takes place over a shorter period than leasing does, typically around 30 days, while leasing is for a longer term of 6 months or a year.
Most of the time, renting follows a monthly process, with the contract typically going up to about thirty days, when they can renew. A tenant or landlord will decide when the renewal should stop by giving enough notice.
Leasing involves a longer contract than renting. The most common length is a year, but some variations are shorter. A lease is a commitment to a period of occupying a space.
Leasing Pros & Cons
Leasing Pros
1. Stability
As leasing is typically for a longer time than renting, you benefit from long term stability. You know what your monthly payments will be for the duration of your lease, which will typically last around a year. Your landlord is not permitted to raise your rent during the leasing period
2. Price Controls
Due to the length of most leases, there's the potential for local rent controls to apply to your lease, depending on where you live. In many cities and states, landlords won't be able to increase your monthly price by more than a set amount.
Leasing Cons
There are a few bad things that can come with a choice to lease rather than rent. It’s critical to look at these before vomiting to a lease. It’s a little more of a commitment than renting is, so it’s vital to be on your feet at all times.
Some of the cons that come with leasing include the following:
- It can be trickier to break a lease off if you run into a big life-changing moment
- You can lose money if you decide to break off a lease, which not everyone can afford
- Less flexibility, thanks to the agreed-upon time in the contract
A lease is much less flexible than renting is in the long run, so if you want flexibility, it won't be your best option.
If you choose to lease, you’ll have more stability and security than with renting. Unfortunately, it can be trickier to get out of a lease. Since a lease is rent-controlled, you might find yourself paying more if the prices around you drop. It’s a calculated risk.
Renting Pros & Cons
Renting Pros
Several good things come with the choice to rent. If you’re debating between renting and leasing, it’s critical to consider these.
Some of the pros that come with renting include the following:
- Flexibility in the short-term, meaning you can leave it at any given moment
- You can work with the landlord to renegotiate the terms if necessary
- You don’t have to fear changes in life, as a rental gives some freedom
A rental has regulations, but it’s flexible over the short term.
Of course, some cons come with renting as well. Let’s talk about those.
Renting Cons
There are quite a few cons that come with renting. It’s vital to know the bad with the good to make the best choice.
Some of the cons that come with renting include the following:
- There is less stability in price and ability to hold on to the place
- Rent can increase in time
Renting is flexible, but things can change on you in an instant. Your rent can increase without too much warning in advance.
Leasing has a set of good and bad that comes with it. Let’s talk about this next.
How Are Renting and Leasing Similar?
There are subtle differences that set renting and leasing apart. The main differences lie in the flexibility of each contract, the duration of time they last, and the stability that comes with each. However, they are also similar in many ways.
Some of the things that make leasing and renting similar include:
- They both deal with a set amount of time
- They provide regulations tenants are required to follow
- They require people to pay a security deposit before moving in for the safety of the rental
- They give the renter or person with a lease payment responsibilities
These make leasing and renting similar.
Renting and leasing are very close, but some subtle things set them apart. Now that you know what they are, you can make the best choice for your future living situation.