Landlords and tenants do not always have to sign leases for one year. They can instead agree to sign a short-term lease. Short-term leases have benefits disadvantages to both tenants and landlords.
A lease agreement is considered short-term if it is signed for six months or less. A month to month lease is one examples of a short-term lease. Short term leases can also be weekly leases or any random duration which can be agreed upon by the landlord and tenant.
The main difference between a long and short-term lease is flexibility. The landlord can change terms of a short-term lease as long as they give proper notice. With a longer term lease, things such as rent are fixed for the entire duration.
Advantages of a short-term lease:
Flexible move-out: One of the main advantages of a short-term lease is that you can move out quickly if you find that things are not ideal. The only requirement is that the tenant must give the landlord proper notice about their desire to leave.
Increase rent: Since the lease is only agreed upon for a short time, the landlord has an opportunity to increase rent at the end of the given period.
Great for vacation rentals: Most people hire vacation accommodation for a short period of time and it could be a week or month. This gives the landlord the opportunity to charge more during peak times and less during off-peak times.
Disadvantages of a short-term lease
Higher rent: Since short-term leases are riskier, landlords will often charge more for rent. This benefits the landlord but can be bad for the tenant.
Terminate lease: The landlord and tenant can agree to terminate the lease quickly with little notice. This can be stressful as the tenant may have to find a new place quickly while the landlord will have to find a new party to rent.