When you don't want to rent something for an extended period, your best option usually is some form of a short-term lease. These leases have some differences when compared to long leases but still can be beneficial for both you and your lessor. If you're trying to decide whether a short term lease is right for you, examining these benefits along with basic facts on short term leases is a good starting point.
A short-term lease is a legal contract that indicates that a lessee will give services or monetary compensation to a lessor in exchange for temporary possession (not ownership) of property. Individuals and companies may use short-term leases for virtually any property. In most cases, a short-term lease lasts less than a year (typically one month to six months), but some industries may define short-term leases as lasting two or three years.
Short-term leases offer flexibility. For example, a person can use a short-term lease to accommodate a temporary move for work or to see whether a vehicle "feels right." Short-term leases also accommodate shifts in a person's financial situation. A short-term lease gives more opportunities to change lease terms, since short-term leases come up for renewal more often. Short-term leases also make it easier to eradicate problematic lessees.
Short-term leases mean higher turnover. This, along with the fact that people may be less sensitive to caring for property they know they won't have for long, may increase damage and preparation expenses for the lessor. Short-term leases also take more time in terms of advertising and finding new accommodations. Short-term leases sometimes carry more expensive rates than longer leases.
Why People Use and Offer Short Term Leases
People sometimes opt for a short-term lease because they want to try out a property before they commit, or because their financial or work situation is unstable. People also use short-term leases because they know that they will not need the property for long.
Lessors offer short-term leases because it usually is financially beneficial to lease property for a short period rather than not at all. Some companies offer short-term leases because other agreements have failed--for example, auto dealers may offer short-term "takeover" leases when someone defaults on regular, original lease payments, thereby ensuring that the dealer can make money for the entire period of the original lease.
People may assume that a short-term lease is legally simpler due to the lease duration, but this often isn't true. Lessors and lessees still are obligated to make payments and provide the property as they would under a long-term lease and can enter court if either party violates the agreement. In the case of takeover of short-term leases, the lessee even may be obligated to pay any fines or other penalties indicated in the original agreement.