Definition of "Short-term lease"
Short-term leases are leases that run its completion in a faster time than regular ones.
In real estate, short term-leases usually refer to temporary housing; that is: rent.
The length of a home lease agreement is defined by the Landlord. There are no rules as to the duration of a rental agreement. It’s a matter of the Tenant agreeing to a reasonable period set by the Landlord. Some Landlords even accept a month-to-month agreement! However, it is customary to consider as a “regular” lease agreement the ones who span from 12 o 18 months. A short term-lease would be anywhere below that.
The most common duration of a short term-lease is 6 months. And it happens quite a lot, especially in cities that are common summer getaways. People rent it for the season to enjoy vacations and then head back “home”. There’s also the contrary: people who own houses and only use it on certain periods of times – like “snowbirds”; people from the north that travels south on winter to escape the cold – and rent the remaining of the year. Plus, short-term leases make the most sense for people that got transferred because of their work. A military person will most likely look for a short-term lease because most of the time they can’t enroll on long leases, as they can be relocated once again anytime soon. Businessmen benefit from short-term leases as well: they usually first rent a place for 6 months while they search the market for the perfect house to buy for their family.
Important to note: short-term leases are usually more expensive than regular leases. That’s because when the Landlord has the guarantee he/she will have a guaranteed income, it’s easier to reduce the rent price. On a short-term lease, the Landlord has no idea when he/she will find a new Tenant to occupy the house. Plus, what guarantee do they have that their house value will drop or rise in six months? As you see, they have a lot of risks with short-term leases, so they raise the price of the rent when allowing this type of agreement.
Real Estate Tips:
Roam through our Real Estate Glossary for more rent-related terms!
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