You just got done with school and you need a place to live, but you’re not sure that you want to commit to a full year-long lease. One great solution is to consider a short-term lease, a short-term rental or a month-to-month lease. Let’s look at seven implications of going short term:
You Can Change Your Plans
Standard leases — which you need to understand before signing — can run from 12 or 18 to 24 months or even longer. While a long lease will give you the security of not having to find a new place to live for a while, there can be problems if you want to leave and move somewhere else. Breaking a lease can cause serious harm to your credit score, you can lose your security deposit, and you can be held responsible for some future rent amounts.
While it is true that landlords generally have the responsibility to mitigate their damages by advertising and actively searching for a new tenant after you have left, again, you still can be held responsible for some rent amounts after you vacate early. With a short-term lease rental, you are just not obligating yourself for a long time period.
Month-to Month Lease
Even if you want to stay at an apartment for a long period of time, you could choose to just do a month-to-month arrangement.
With this plan, you have to give the landlord 30 days’ notice that you are going to vacate, and he or she must give you 30 days’ notice if you are required to move.
The advantage to you of this short-term lease is total flexibility as you can cruise quickly if you want to, especially if you hire a great moving team. The disadvantage is that your landlord can force you to leave with only a month’s notice.
Raising the Rent
Leases spell out rental terms and rates and while you may have to endure lease-dictated rent increases, at least you’ll know what they are, what’s coming, and what you will have to do to prepare budget-wise. With a month-to-month or a short-term rental agreement, your landlord could raise the rent significantly unless local rules and ordinances prohibit it.
You could be in a situation where your rent could quickly double, and since if you are renting month-to month, your landlord will usually only need to give you 30 days’ notice of a rent increase.
Another reason for going short-term instead of long term is your employment situation. If you are just starting a new job, you may want a more temporary living solution until you’re sure that your position is going to be exactly what you want. With unemployment rates at historically low numbers, jobs are easier to find than ever, and if you are in a hot position like coding and website development, you may find that get numerous and continual job offers. If you work in Fargo and someone makes a great offer for you to move to Austin, TX, but you’re stuck in a long-term lease, you might have a problem.
If you have always lived by yourself, living with a roommate might be a serious shock. She may like dogs, but you don’t. He parties—you’re quiet. While opposites may attract, you won’t necessarily want to live with them. A short-term rental can give you the room you need to end any unwise roommate associations quickly.
Cost of a Short-Term Lease
Landlords do like long-term leases, however, because every time a tenant moves out, a landlord can lose a month’s rent. Whether it’s they own a huge Chicago 2-bedroom apartment or a small studio in Chicago, the cost of cleaning and retrofitting an apartment for a new tenant can easily cost $1,000 or more, and the time it takes to find a suitable tenant can vary greatly. While some landlords are expert at not losing a day’s rent, if an apartment is always leased on a month-to-month basis, it’s very difficult not to lose some rental income.
Therefore, if you do land a month-to-month situation, be ready to pay a higher rent than if you would sign a one or a two-year lease.
Month-to-month rentals are great if you have a short-term job, need to come and help a sick family member, are building a home, are looking for a new home after you unexpectedly just sold your other one, or again, if you’re just trying out a new locale to see if you really like living there.
Short-term, month-to-month or even medium-term six-month leases are not for everyone. People buy homes so that they don’t have to worry about moving, and many persons that rent choose longer term rentals for the same reason. Stability is important, and while even a year may seem like a long time, before you know it might be time to renegotiate another year’s rental.
But if you are unsure of your future plans, and just want to test the waters for a short period of time, a month-to-month rental or a short-term lease may be just what you need now.