It’s no secret that buying a new home is a herculean task! However, planning to live in a rental property can also be an overwhelming process. One of the most common questions while searching for a house, is whether to sign a lease agreement or a rental agreement. On a surface level, a lease and rent may sound similar; however, there is a major difference between the two of them.
You must research and understand the difference between lease and rent to make an informed decision. Let’s first start with the basic definitions of lease and rent in India.
|Basis for Differences||Lease||Rent|
|Definition||“Lease” is agreeing with the lessee (in simple terms, tenant) to use a property for a long period of time.||“Rent” is entering into a contract with the tenant to use an asset only for a short period.|
|Maintenance||In a lease agreement, property maintenance responsibility lies on the lessee.||In a rental agreement, the property maintenance responsibility lies on the homeowner.|
|Changes in Agreement||Once the agreement is signed, no changes can be made throughout the duration.||The homeowner can make changes to the agreement whenever he/she chooses to do so.|
|Term||Generally, a lease agreement lasts for 1-3 years.||A rental contract generally lasts for a short duration.|
Now that we know the basic difference between lease and rent in India, let’s take a close look at the benefits.
If you want to stay in a place for more than a year, a long-term lease agreement can offer several benefits, such as:
Living in one place for a long period can provide several benefits financially. Unlike short-term rental agreements that charge premium prices, a year or two-long lease agreement can lower your monthly charges. Besides, this cost-saving means you can look at signing a lease for a better apartment in a suitable location.
When it comes to lease vs rent, many homeowners will not want to offer short-term contracts due to the risk of tenant turnover. Thus, there’s a large market for individuals looking to stay in a home for over a year!
Getting into a 12 or 24-month lease can give you the chance to negotiate your monthly payments. Homeowners will be more inclined to reduce the charges if you intend to stay for a longer period of time.
If you intend to stay in a place for a shorter duration, a rental agreement can offer several benefits, such as:
Month-to-month rental agreements often require a very short notice period before you terminate the contract. This gives the tenant full flexibility if they are unsure about staying in a place for a longer duration.
When it comes to lease vs rent, a long-term lease agreement usually means that both the landlord and tenant are bound to what they agreed upon initially. However, in a rental agreement, the contract can be adjusted as per what’s suitable for both parties.
Short-term rental agreements are also beneficial for tenants who may have to break their contract, due to unexpected circumstances. This allows renters the flexibility to break a contract, without accumulating excessive fees or penalties.
If you are searching for Lease vs Rent, remember that they are very different, even though they sound very similar at first. As mentioned earlier, you must do plenty of research before you narrow down on an option. If you’re looking to live somewhere in and around Bangalore, we have a comprehensive guide on living in Whitefield that provides you with all the information you need to know! If you’re looking to spruce up your space with decor this festive season, check out our blog on eco-friendly home decor ideas for some inspiration! You can also check out our various residential projects, consisting of villas, row houses, and apartments that aim to give you the luxury and comfort you desire!