Pros and Cons of Short-Term Leases
Majority of Landlords do not handle Rental properties professionally. Although a landlord doesn’t have to sign a full year lease agreement, they tent to come to agreement of month per month basis. Commonly called Monthly Renting.
Below am going to discuss the Pros and Cons of short-term leases to both Landlords and Tenants. Take a look:-
What Are Short-Term Leases?
Any lease agreement that is less than Six Months is considered a short-term lease.
Monthly lease is a good example of short-term lease although in some cases a landlord and tenant can come to an agreement of weekly basis which is also considered short-term lease.
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In hotels where rooms are leased per night is also considered short-term lease.
How Is It Different From Long-Term Leases?
Flexibility is the main difference of Long-Term Lease and Short-Term Lease. In Short-Term Lease, a Landlord can change the agreement terms as long as He/She serves the tenant a Proper Notice.
Long-Term Lease has fixed agreement and Landlord does not have the power to amend or change terms of Agreement such as Rent Increase or vacation until the Lease Agreement expires.
Advantages of Short-Term Leases
Below I have identified and discussed several advantages of Short-Term Leasing to both Landlord and Tenant:-
- Rent Increase.
- Change of Terms of Lease Agreement.
- Perfect to Holiday Rentals.
- Flexible Move-Out.
- Long-Term Leases can Change To Short-Term Leases after Expiry.
Rent Increasing: short-term leases
This subject is too sensitive to tenants and it brews a storm and hostile relationship during tenancy.
Often during Lease Renewal, landlord has the power to increase rent at his will even though there is a law governing such, a landlord has to serve Rent Increase Notice to the tenant 90 days before the effective date but this clause depends on country to country.
Change of Terms of Lease Agreement: short-term leases
The Landlord can decide to change policy he may decide suits him/her regarding the rental house.
During tenancy the landlord or landlady can draw a circular to the tenants baring use of charcoal to cook inside the house, Pets or banning car parking in front of the gate or inside the rented compound giving the landlord the power to decide for the tenant how to live.
This agitates the tenants and they don’t like such kind of powers bestowed to property owners. Parliament has the power to legislate to tame such land-lording powers.
Perfect to Holiday Rentals
Beach properties experience the most Short-Term Leasing due to seasonal housing demand by tourists. People prefer to rent weekly or less for the duration they gonna stay at the beach.
The kind of renting is so lucrative to property owners as the properties are in high demand during high seasons.
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When you visit a certain city and you have no relative or a friend to accommodate you for the night you end up renting a hotel room for a night or two. Yah! and by this you promote the tourism sector.
Flexible Move-Out: short-term leases
Tenants want freedom to choose and decide for themselves. This is the reason they prefer the short-term leasing to enable them move-out at their will.
Sometime this move-out is governed by the lease agreement as a tenant is required to give Proper Notice of Vacation which applies to cases where the Lease is more than a month.
Long-Term Leases can Change To Short-Term Leases after Expiry
What these means is that, after the Long-Term Lease expires the Property Owner can change the leasing policy to Short-Term, unless the Tenant agrees to renew to Long-Term Lease again.
Dis-Advantages of Short-Term Leases
Tenants and Landlords should consider several disadvantages of short-term leasing agreements listed below.
- High Rent: For sake of security Property owners tent to charge high rent due to unreliability of the tenancy form. Tenant can move-out anytime and leave the property vacant Leaving the property owner at a loss in case the property takes long before another tenant enter the house. Only the Landlord benefits and disadvantage to the tenants.
- Lease Termination: In this case both Tenant and Landlord can or have the ability to end tenancy even without proper notices served to the other party leaving the landlord for example to start looking and marketing the property again to source a new tenant. This comes at a cost to the landlord. In case a Landlord decides to terminate a lease and the Tenant was not prepared, it will be stressful for the said tenant to begin sourcing another property to migrate to and you understand how the process is tiresome.
- Changing of Terms: Increasing of Rent is the major disadvantage in this category and you know some landlords tend to hike rent at their will which is annoying. Law protects such occasions. in case a landlord decides to increase rent the Law States that he or she must serve tenant a Proper Rent Increase Notice which should take effect after 90 days.
Main Benefits to Landlords: short-term leases
- The ability to change terms of leasing agreement.
- Landlords can charge higher rent at will
- Charge Higher rent often.
Main Benefits to Tenants: short-term leases
- Ability to move out quickly.
- Buy a new home.
- Can decide to relocate to new neighborhood.
Sample Short-Term Lease Clauses
A Short-Term lease has most of the Same Clauses as long as Long-Term Lease Agreement. The biggest difference is the length of the Lease Agreement. Below you will find Three Samples of Leasing Clauses.
Lease Term: short-term leases
The Lease will begin on …………………………….. and will continue as month Tenancy until either Landlord or the Tenant terminates the lease by giving Notice To Vacate.
Rent Increase: short-term leases
The landlord may increase rent by first giving The tenant a 90 days Rent Increase Notice Prior to lease renewal.
Lease Terminating: short-term leases
If any case the landlord decides to terminate a leasing agreement, the said party should and is required by law to serve Lease Termination Notice to the Tenant and if there is no breach of agreement this notice must follow the law.
