A lease is a document that outlines the responsibilities of a tenant and landlord for the duration of the tenancy. Rent is the amount of money a tenant agrees to pay the landlord each month while occupying the rental. In a rental arrangement, it’s important for the landlord and tenant to understand the different types of leases available and the terms of a lease before entering into a contract together.
Note : This guide is for informational purposes only. Zillow, Inc. does not make any guarantees about the sufficiency of the information in or linked to from this guide or that it’s compliant with current, applicable or local laws. Landlord-tenant laws change rapidly and may be regulated at the federal, state and local levels. This resource is not a substitute for the advice or service of an attorney; you should not rely on this resource for any purpose without consulting with a licensed attorney in your jurisdiction.
While people commonly think the difference between a lease and rental agreement is the lease term — e.g., a six-month lease or one-year lease — a lease and rental agreement are actually the same thing and can be used interchangeably. However, there are different types of leases. The two common types of leases are a fixed-term lease and a month-to-month lease.
A fixed-term lease: has a set end date, which is commonly between six months and a year but may also span multiple years.
A month-to-month lease: automatically renews every month until either the landlord or tenant chooses to terminate the agreement. Many states have specific laws around terminating a month-to-month lease.
Leases and rental agreements are beneficial for both the landlord and the tenant, as they make the requirements and expectations for both parties clear. When trying to decide between a fixed-term lease and a month-to-month lease , consider the advantages of each type.
A fixed-term lease provides the landlord with the stability of a long-term tenant and a guaranteed source of income for a set period of time. Use a fixed-term lease to provide your tenants:
A month-to-month lease offers more flexibility, allowing you to rent out properties to tenants who might be looking for a short-term commitment. Use a month-to-month lease if your tenant is:
It’s up to you and your tenant to reach a mutual understanding on which lease term is best.
Once you’ve decided on whether your property will be available as a month-to-month or fixed-term lease, you’ll want to list your rental and have potential renters complete a rental application . You may also consider running applicable background and credit checks . After they pass the screening process, you’re ready to create a lease and have them sign it.
In general, here are a few items that are found in many leases:
In select locations, Zillow Rental Manager allows landlords to create either a month-to-month or fixed-term lease that includes the most important details and protections. Find out when this tool will be available in your area.
No matter the state you live in, you’ll want to check with a local real estate attorney to ensure you’re following all applicable landlord-tenant laws in your area before creating, changing or administering a lease.
For more articles, tips and trends about creating a lease, finding tenants and being a landlord, visit our Rental Resource Center .
