Okay, we all understand the difference between renting and buying. But what about renting and leasing? Is a lease and rent the same thing?
Alright, some of us can admit that we actually didn’t know there was any difference at all when considering lease vs rent, but there is. Whether you’re considering a new apartment to lease, office space for rent, or home to sublet, it’s important to understand the difference between lease and rent to know just what you’re getting into, and we are here to break it all down.
The chief difference between a lease versus rent is how long your contract is in place. To be considered a lease, it typically has to be at least one year long, although there are some longer increments available as well, such as a two-year lease. On the other hand, a rent agreement typically lasts for about 30 days at a time, giving a tenant the freedom to commit on a month-to-month basis.
With this in mind, leases are typically more common than rental agreements since most people are looking to commit to at least a year in one place. Hey, moving isn’t easy. This is additionally a perk for landlords, so they aren’t constantly looking for new tenants to fill a space.
Ending the Contract
Another key difference in the lease v rent debate is how the contract ends. In terms of a lease, it benefits both tenant and landlord as the landlord essentially agrees to not suddenly evict a tenant, while a tenant commits to staying and paying their rent each month for the duration of their lease agreement.
However, a rental agreement doesn’t provide the same security as a lease. While there are contracts involved and are typically set to renew every 30 days, a landlord has the authority to terminate this agreement at any point and with very little notice.
Similarly, a tenant can leave right when the 30 days end without any additional obligations to the landlord. While this will allow a tenant a great deal of freedom - perfect for those looking for temporary accommodations - it can be a more nerve-wracking agreement.
Fixed Rent Payment
Still, wondering what is the difference between lease and rent? Fixed rent is another key factor in the debate.
A big advantage of having a lease is that you can lock in a fixed rent price that the landlord isn’t permitted to change until the lease agreement ends. This helps avoid sudden hikes in rent that can come with popular cities and locations. Where one can really see the perk of this is when signing a multi-year lease, ensuring the rent stays in the same place, no matter how prices may have changed.
On the other side of things, with a small office or large office that’s being rented for a shorter period of time, a landlord has the full authority to raise the rent at their will, something that can become a burden on tenants that are hoping to stay.
Pros and Cons of Leasing
Let’s dive even deeper into the for lease vs for rent comparison, starting with leasing. To help you make an educated decision when signing your next contract for a fresh space, 620 N LaSalle introduced here are some of the pros and cons of leasing.
Advantages of Leasing
There’s no shortage of perks of opting for a lease agreement. From more stability and security to a standard rent, here are a few of the top benefits of choosing a leasing contract.
- Increased stability: Moving around can be chaotic, but when signing a lease, you can guarantee more stability than renting. With a lease agreement, you are permitted to stay in the space for the full amount of time agreed upon in your lease, offering peace of mind to those ready to commit to one spot for at least a year.
- Avoid rent hikes: With a lease, your landlord isn’t allowed to increase the rent during a current contract. This means the price you agreed upon at the start must remain for the full duration of the lease.
- Renew with rent control: In areas that allow rent control, you are allowed to renew your lease at the exact same price as you initially signed or with some slight percentage deviation. This is beneficial in expensive cities that are constantly seeing an increase in rent.
Disadvantages of Leasing
While there are a lot of benefits of opting for a lease over rent contract, there are a few downsides to this agreement. The top cons include:
- Lower flexibility: With a lease agreement, you have less flexibility when it comes to the amount of time and the price. For example, say all the rents in your area are suddenly declining. While this is of great benefit to your neighbors, your own rent price will stay the same.
- Difficulty with sudden moves: If you suddenly need a change of scenery, a lease will sometimes get in the way. A new job or family obligations can lead to a necessary move, but unless you’re allowed to sublet, you may struggle to get out of your agreement early.
- Downsides to breaking a lease: If you do find yourself in a situation where you need to leave your lease early, there can be some significant consequences. These can include losing your security deposit or having to pay the rest of your rent for the duration of the lease. Be sure to check the terms of your lease before signing to avoid major downsides.
Pros and Cons of Renting
Similar to leases, there are both advantages and disadvantages of renting. To better understand the terms of a rent agreement and make a more educated decision when choosing between a lease and rent, check out these pros and cons.
Advantages of Renting
To start with the positive, here are a few advantages of opting for a renting agreement.
- Flexibility in the short term: One of the biggest perks of renting is that you can opt for a monthly agreement, making it incredibly convenient if you are only staying in a place for a short period of time or want to test out your options before committing.
- More accommodating to change: Dissimilar to a lease, renting allows you to more conveniently pick up and go in the case any big life changes occur that force you to leave your space.
- Renegotiations: After 30 days of renting, it usually moves to a month-to-month contract. At this time, you have the opportunity to actually renegotiate your agreement, allowing you to potentially pay a lower price or ask for a pet to join the space.
Disadvantages of Renting
As in every situation, there are both pros and cons of renting. Now, let’s dive into some of the downsides to this agreement:
- Lack of stability: Since renting is only a commitment for 30 days, both you and the landlord can end this agreement at the end of those 30 days. While this can feel like freedom, it can lead to a sudden loss of housing if a landlord quickly decides your time is up. For this reason, it’s important to take a careful look at your agreement to understand how much notice the landlord must provide before the end of a contract if they don’t let you renew.
- Increasing costs: In many situations, a landlord actually has the ability to raise your rent at every new contract time. This means that your rent could potentially go up every month. However, this increase will depend largely on increases in property values, which would then be reflected in your rent. Make sure to understand how much notice your landlord must give about an increase in rent.
No matter where you stand on the lease versus rent debate, it’s important to consider your top needs and which agreement will best suit you. While it may sound nice to have the flexibility of renting, are you prepared for increases in costs or the sudden end of the agreement? While there are pros and cons to both, the right choice is entirely up to you.
At 620 N LaSalle, we offer offices for rent and lease in River North, Chicago. Contact us for the selection of office space.
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