The rental market is fast-moving and constantly changing, making the market a highly competitive space. Because of this, it is important to be knowledgeable on its ins and outs before jumping into the next rental opportunity you see.
THE PROS AND CONS OF RENTING
Renting is a good financial decision for many who cannot afford to purchase their own home, since it is relatively cheaper to do so. Rent fees are often flexible and arrangements with the landlords can be made. It also offers more mobility and freedom to change from one place to another — making it a convenient choice for those who travel and work on jobs that require a lot of moving around. Lastly, it is very low maintenance. There is less burden for the renter given that they are not bound by responsibilities of its ownership.
The biggest downside when it comes to renting a place is that there is no equity built from paying the rent. Unless the property is rent-to-own, you as the renter will not be able to have ownership of the place in the long run. The bottom line is: It is a matter of knowing whether you are only looking for a temporary place to stay in or a permanent one.
RENTAL LEASE AGREEMENTS
Rental lease agreements are legally binding contracts that help landlords and tenants avoid disputes and resolve any issues that may arise. It is often a requirement for any rentals to protect both parties from any losses. It also sets some policies, restrictions, and requirements for both the tenant and landlord.
There are multiple types of rental lease agreements which can refer either to the length of the agreement or the type of property being rented.
1. Fixed-Term Lease
Fixed-term leases allow the lessee to rent the property for a specified duration for a fixed predetermined rental rate. This can be a short-term or a long-term agreement, depending on the arrangements made with the landlord. In case the lessee does not stay for the entire duration of the lease, some landlords may ask them to pay a penalty fee, unless there will be a replacement renter.
2. Automatic Renewal Lease
This type of lease renews automatically after a set period. This is also known as periodic tenancy and can be renewed on a monthly, quarterly, or yearly basis. This may continue until the tenant or the landlord provides notice to end the lease.
3. Sublease Agreement
A sublease agreement is a contract between the third party and the lessee. This arrangement is made only if the lessee who has the residential lease with the landlord is granted permission to rent the property to another party. The landlord may be or not be involved in the sublease depending on what is stated in the contract with the initial lessee.
4. Rent-to-Own Lease Agreement
A rent-to-own lease gives the tenant the option to purchase the property at the end of the contract. This is a good alternative for those who are looking into purchasing a place but cannot afford to immediately do so. It also gives the landlord a steady income stream before the completion of the sale.
5. Standard Residential Rental Lease Agreement
This type of agreement is used to rent out a residential property for a fixed duration. Most often than not, the regular duration for this type of lease is one year. The specifics on a standard residential rental lease agreement may differ depending on the type of residential property being rented.
6. Room Rental Agreement
As the name suggests, this type of rental agreement is for renting rooms. You can opt for this kind of contract in case you want to set specific rules and boundaries in terms of utilities and payments among other things.
7. Commercial Lease Agreement
A commercial lease agreement is for those who wish to rent a property to operate a business. This can be used when renting industrial facilities, office buildings, restaurants, and retail spaces.
8. Land Lease Agreement
This type of lease agreement is used to rent a piece of land for the following purposes: agricultural, commercial, and residential. The land does not have any property in this context.
In case you are a tenant looking into renting a property, make sure to choose the right type of rental lease agreement that fits your current needs and situation. Likewise, if you are a landlord renting your property, make sure that you are also protected by setting in place an agreement.
In creating a lease agreement, it’s advisable to work with a lawyer so that the contract will cover the rights of both parties and provide adequate protection. At the end of the day, any agreed upon arrangement should benefit both the landlord and the tenant.
Sources:
Rental lease agreement. (n.d.). Retrieved September 08, 2021, from https://www.contractscounsel.com/t/us/rental-lease-agreement
Renting an apartment. (n.d.). Retrieved September 08, 2021, from https://www.practicalmoneyskills.com/learn/life_events/renting_an_apartment
Robertson, T. (2016, October 07). Types of apartment leases. Retrieved September 08, 2021, from https://homeguides.sfgate.com/types-apartment-leases-54887.html