subject: The Difference Between Leasing And Renting [print this page] With the financial challenges of owning a home, renting and leasing both becomes in demand for people who are looking to find shelter but do not have enough money to finance a mortgage plan. Some people get confused that renting and leasing are similar. Actually, they are not. They are two different things that have different terms.
Renting vs. Leasing
Renting is a contract term where the tenant pays a monthly fee in exchange of being in control of a property. That contract is not binding. The tenant can leave the property at will and the landlord can kick him out of it, also at will. Leasing, meanwhile, is where there is a binding contract for a specific period of time. Within that period, no movement in the contract or what was previously agreed upon may take place, unless both parties wanted the change.
In a way, leasing is far more attractive than renting. That is because you and your landlord are actually bound by a written agreement. But on second thought, that feature could also be a disadvantage.
In a leasing contract, all rules and regulations are stipulated clearly whether it is about having pets or children around or the amount of rent you should pay each month. You have to comply with those rules for the duration of the lease or the finite term otherwise you will face applicable penalties.
One good advantage of a leasing contract from a renting contract is that, you will pay the same amount of rent every month, for the duration of the lease. The current market conditions do not matter and will not have any effect on your rent. In case of renting, you will have no say once your landlord decides to raise the rent monthly or every six months or annually. If you do not like the current terms, you may leave or may be evicted from the property without a word.
Also, the landlord is bound to respect your contract until the lease expires. Even if he meets a renter who will pay more for his property than what you are giving him, he cannot ask you to leave until the remainder of the contract is fulfilled.
On the other hand, a tenant who agreed upon a leasing contract is obligated to pay the rent regularly. He is also bound to follow any stipulations in the lease while it is in effect. He also cannot leave the property just like that without a lease break. A lease break, in the real estate world, is an amount of fee that a tenant has to pay for breaking the contract.
A leasing contract is generally used by those landlords who prefer to lock in a tenant to a long-term agreement. On the other hand, it is sought after by tenants who require stability. A renting contract is used by those landlords who cater to professionals who are always on the move. It is also applicable to students who appreciate the freedom that a month-to-month agreement provides.
There is a significant different between renting and leasing. Before you decide on a property, make sure that you understand that difference so you know what exactly will meet your needs.
