What’s the difference between these two common real estate terms?
As someone thinking of becoming a landlord, real estate investor, or renter, you might have heard the terms lease and rent thrown about in your lifetime. If you are not familiar with the real estate world, there is no better place to get acquainted than here. Defining terms is a great place to start. With that said, what’s the difference between a lease vs. rent?
What’s the Difference between Leasing and Renting?
Is there a difference? Renters and real estate professionals practically use them interchangeably. Even so, people generally consider leases to refer to long term, stable agreements and rent to be short term and more flexible. One might go so far as to refer to the two types of rental/lease agreements, fixed and monthly, as lease vs. rent agreements.
However, it is also valid to refer to both as lease agreements. Some people might refer to the contract as the lease and the monthly payment as the rent. How you use these two terms ultimately depends on your community.
Two Types of House-Letting Options
The question might not really be about lease vs. rent; it is arguably more important to know about the two types of house-letting options and which would work best for you as an investor or tenant.
Fixed Term
A fixed term lease allows the tenant to dwell in a particular rental for a longer period of time with a set monthly payment. This time period is usually six months, a year, or longer. The contract will define this information, along with the responsibilities of the tenant and the landlord, which includes property maintenance.
A fixed term contract is better for landlords who prioritize a stable passive income. Tenants who want a stable home and fixed rental rate will like this option more.
Monthly
Monthly rental contracts renew every month, and the rent rate is subject to change. The contract should also be crystal clear on what the tenant and landlord responsibilities are.
Landlords who want flexibility in changing rent rates might prefer the monthly lease; renters who are in a transition period or want the flexibility to move quickly will also prefer this agreement.
Get Advice from a Professional in Frederick, Maryland
Which kind of rental agreement would you choose as a landlord? Clagett Enterprises can provide professional advice in Frederick, MD. We can also help you as a property manager!
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If you’re looking for an experienced property management company, the perfect realtor for your property, or a professional to assist you during your purchase of any home, you can rely on Clagett Enterprises. Clagett Enterprises is a full-service real estate company with almost 30 years of experience in the Frederick and Western Maryland area. For assistance with commercial sales, leasing, management, and development and consulting, contact us online or give us a call at 301-665-6009. To meet our team and see some of our beautiful homes, follow us on Facebook and Linkedin.