No one likes to be locked down. But these days, signing a multiyear lease might not be such a bad idea.
Sure, committing to the same apartment for longer than a year, when none of us knows what the future holds, might give you pause. But hear us out, commitment phobes!
If you’re a renter who’s happy at your current location, or you’re prepared to move and sign a new lease, it may be worthwhile to consider signing a multiyear lease for a number of reasons.
Once you’re locked in to a multiyear lease, you will have an exact financial picture of how much rent you’ll pay for the life of the lease. That means you’ll be able to plan further into the future, and potentially save money by avoiding any annual rent raises.
To make the case for a longer-lasting lease term, we asked experts to explain the benefits for renters. See what they had to say below, and find out whether a multiyear lease might be a good choice for you.
1. More predictable housing costs
A multiyear lease means the tenant and the landlord will have some control over housing costs, at least for the term of the lease. And more predictable housing sounds pretty good right about now.
“Since property taxes and other expenses tend to incrementally increase each year, many landlords and property managers will seek to compensate by raising rent annually,” says Brentnie Daggett, a rental expert at Rentec Direct, a property management software company based in Southern Oregon. “Generally, a multiyear lease will ensure that your rent won’t increase each year.”
Natela Shenon of Shenon Law Group in Sherman Oaks, CA, agrees that having price predictability can be a benefit.
“No matter what will happen in the economy over the course of the term of the lease, whatever price is agreed upon will stay the same. This means that the tenant also has the ability for more accurate personal-financial forecasting,” says Shenon.
2. Peace of mind
With a multiyear lease, you don’t have to worry about your rent being raised, or having to scour through listings for a new place, for a while. This is especially enticing if your area is experiencing higher rents and declining vacancy rates. Staying in your current place and on a multiyear lease could bring peace of mind.
“A multiyear lease gives the tenant the comfort of knowing that they can live at this place for a particular term without having to worry about possible relocation year over year,” says Shenon. “This means that they can secure long-term employment in the same area or send their kids to a particular school and not have to worry about pulling them out because they must move.”
3. Discounted rent
Did you know finding tenants can actually be a pain in the neck for landlords?
“Cleaning the rental after tenants leave, marketing the vacancy, screening applicants, and moving in a new tenant is a long and costly process,” says Daggett.
But if you’re willing to sign a multiyear lease, some landlord may be willing to make it worth your while in the form of reduced monthly rent. So if you don’t anticipate any big life changes that warrant a move anytime soon, this might be a good option to consider.
4. Less frequent moves = less money (and less stress)
No matter how you slice it, moving is stressful. It takes a lot of effort and time to search for apartments, tour properties, and contact listing agents. Plus, application fees, security deposits, packing materials, and a moving company can be expensive. But despite all that, renters tend to move frequently.
The average U.S. renter in a multifamily building stays put for 27.5 months, according to research by ResidentRated, a renter satisfaction survey program.
So if the idea of moving makes your stomach drop, getting into a multiyear lease might make the most sense.
“If you can eliminate moving annually, the savings, not to mention the stress reduction, can be significant,” says Daggett.