After your apartment application gets approved, your landlord may offer you a choice of lease terms, such as one year or two years. In your excitement to sign the lease and settle into your new place, you may be tempted to opt for the longer term. A longer lease term might very well be the best choice for you. But before you commit to one lease term or another, take a moment to consider the pros and cons of each.
One-year leases are pretty much the going standard in world of renting. That’s because a year is long enough to provide stability to the landlord yet short enough to offer flexibility for the renter. Don’t like the neighborhood? Easy – you can move out in a few months. On the other hand, if you decide you like your apartment and you’ve been a good tenant, you should be able to continue living there by renewing your lease.
One-year leases come with their own set of disadvantages, though. Between lugging in your couch and mattress and then unloading all your DVD’s and kitchenware, it sometimes feels like it takes the entire year just to start to feel at home in your new place. Sometimes, when the only guarantee you have for your place is just a year, it may not seem worth all the hassle of moving. There’s definitely a temporary feel to the whole arrangement.
While renewing your lease when the year is up may be an option, you risk changes to the terms, including an increased rental rate. Generally, the trend is that rents tend to increase each year. This isn’t a hard and fast rule, but it’s a pretty safe bet.
A two-year lease, on the other hand, is going to give you less flexibility but more stability. The greatest benefit is rent control because, as the term implies, a two-year lease doesn’t renew every year with a likely rent increase. If you’re confident that you’ll stay in your new apartment for a while, consider signing a lease for a two-year term, if it’s available.
There’s a certain peace of mind here. You’ll know that you’re set in your new home for at least two years. Plus, since your landlord won’t have an opportunity to choose not to renew your lease in 12 months, you can stay for 24 months. The savings may be significant if you’re in an economy where rents are expected to climb.
Not every place offers a two-year lease, however. A notable limiting factor here is that two-year leases are normally only available at higher-end homes and apartments. This is because a landlord typically expects a better-quality tenant and takes a bigger risk on renting out a higher-priced place. So that’s one major potential drawback: by saving more on increases over two years, you’re likely going to be dealing with a higher rent to start with.
Can you ask a landlord for a two-year lease even if he/she doesn’t offer one? Certainly. Finding renters and refreshing an apartment after a renter leaves is costly and time-consuming for landlords. If you’re willing to sign a two-year lease, you may be able to negotiate with the landlord for a lower monthly rent. After all, you’re guaranteeing that rental income for two years, so the landlord doesn’t have the risk of a vacancy during that period.
You also might find that negotiating a two-year lease – especially after renting for one year – leads to a better relationship with your landlord. Again, by accepting a two-year lease, there are advantages to them as well. Landlords with two-year tenants tend to be more responsive and prompt when handling issues, because they understand the benefits of having a long-term tenant they trust.
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