Renting vs leasing an apartment: Differences, benefits, and more

What is renting?

Renting refers to a short-term arrangement in which a tenant pays the property owner (or landlord) for the right to occupy a space, often on a month-to-month basis. In most cases, short-term rental agreements are for less than 30 days at a time, giving both parties the flexibility to renew or terminate the agreement with relatively short notice.

This article is not intended to, and does not, constitute legal advice or create an attorney-client relationship. Board members should consult their association’s attorney to discuss the legal implications of their decisions or actions prior to proceeding.
 

What is leasing?

Leasing is a longer-term agreement between a tenant and landlord, usually lasting from six months to a year or more. Leasing an apartment typically involves signing a fixed-term contract that outlines specific terms, including rent amount, duration, and responsibilities for both the tenant and landlord. Breaking a lease early can come with legal or financial penalties, depending on the lease terms and applicable local laws.
 

Key differences between renting and leasing

The main difference between renting and leasing comes down to timing. Renting is usually a short-term, month-to-month arrangement, while leasing tends to involve a longer commitment with set start and end dates.

Other important differences include flexibility and costs. Renting gives residents more freedom to relocate or adjust plans with less notice, which can be helpful during times of transition. Leasing offers more consistency, both in monthly costs and in terms of what’s expected, which may appeal to those looking for a longer-term option.

Both arrangements are legally binding, but leases tend to be more rigid in terms of costs. Renters may see occasional rent increases, while leaseholders often benefit from stable pricing but have fewer options to end the agreement early.
 

Renting vs. Leasing: Pros and Cons

The choice between renting and leasing comes down to what matters most to the tenant: flexibility or stability.
 

Renting Pros

• Short-term flexibility if your plans are uncertain
   
• Typically easier to relocate without penalties
   
• Some landlords may offer furnished units or flexible payment options

Renting Cons

• Rent may increase with less notice
   
• Less long-term security
   
• Limited access to long-term resident perks or pricing

Leasing Pros

• Typically a fixed rent price throughout the lease term
   
• Greater housing stability
   
• Ideal for long-term planning

Leasing Cons

• Ending the lease early could result in penalties
   
• Less flexibility if your plans change
   
• Requires a longer upfront commitment

Financial implications of renting vs. leasing

Renting vs. leasing may affect a tenant’s budget and planning. Renters might pay more in the long term due to periodic rate increases, while leaseholders usually lock in a rate for the duration of their agreement.

Security deposits are usually required in both cases, but lease agreements may include additional costs such as early termination fees or damage clauses. It's important to review the specific contract terms before signing.

In markets with rising rental prices, locking into a lease can provide cost protection. However, for tenants unsure of their long-term needs, renting may help avoid the risk of early lease termination fees.
 

Legal considerations in renting and leasing

Whether you’re renting or leasing, both options come with legal responsibilities. A written agreement outlines monthly rent, maintenance expectations, notice requirements, and how either party can end the arrangement.

Breaking a lease early can sometimes result in financial penalties, such as losing part or all of a security deposit. Renters on shorter-term agreements may have more flexibility, but it’s important to review the terms carefully, as some penalties may still apply.

Depending on the property type, renters and leaseholders may also need to comply with HOA rules or condo association bylaws. This may include policies related to noise, guest stays, or shared amenities.

If you have questions about your rights or what a specific agreement includes, it’s important to speak with a qualified attorney who understands your local laws.
 

Maintenance responsibilities in renting vs. leasing

Maintenance expectations are usually outlined in your rental or lease agreement. In most cases, landlords handle major repairs, and anything related to safety or habitability, while tenants are responsible for everyday upkeep, maintaining cleanliness, and reporting issues when they arise.

Some lease agreements may include extra responsibilities for tenants, like taking care of outdoor spaces, replacing air filters, or handling small repairs. That’s why it’s important to review your agreement closely to understand who handles what. If your building or community has partnered with a property management company, your property manager is often your go-to for maintenance requests or questions.
 

How to decide between renting vs. leasing

If you need short-term flexibility, renting is often the better choice. If you’re looking for longer-term stability and predictability in your housing expenses, leasing may be a better fit.

Here are some scenarios that can guide your decision:

• Relocating soon? Renting might suit your needs.
   
• Settling down or starting a family? A lease typically offers more housing security.
   
• Job changes likely? Renting provides more mobility.
   
• Budgeting long-term? Leasing may offer fixed rent and fewer surprise increases.

There is no one-size-fits-all solution. Your choice depends on lifestyle, financial goals, and how long you plan to remain in the apartment.
 

Renting vs. leasing for landlords

For property owners, the choice between renting and leasing often comes down to what works best for your building, your residents, and your long-term goals. Leasing can provide a fixed income over a set term, reducing vacancy risks. Renting allows for faster tenant transitions and more flexible pricing, making it easier to adjust rates in response to a changing market. High-rise buildings, for example, may rely on long-term leases to support more consistent operations and an amenity-rich resident experience. Smaller properties or those with seasonal demand may benefit from shorter rental agreements.

Generally, leases require more upfront screening and paperwork. Renting agreements may be simpler but riskier in terms of tenant retention. Some property owners blend both models depending on the property type and local demand. A property management partner can help you make an informed choice and carry it out with confidence.

At FirstService Residential, we leverage our expertise in multifamily property management to provide the lifestyle experience today’s renters expect. All you have to do is watch your community and portfolio thrive. It’s that simple.

Contact us today to learn more.