Should I rent or lease my house? What are the differences between the two?

One of the most frequently asked questions by landlords is whether to rent or lease their rental property to tenants. Although, a small fraction of homeowners possess clarity on differences between the two kinds of agreements (rental and lease), a vast majority of landlords are in the dark, with less knowledge on the agreement’s nitty-gritties. Let us delve into understanding the differences between the two kinds with pros and cons of each one of them have for a landlord –


  • Periodic payment is received by the landlord
  • Flexible in terms of amendments, such as hike in the rental amount, asking the tenant to vacate the property etc.
  • Rental amounts will stay with the landlord, unlike in case of lease agreements where the lease amount has to be repaid during the end of lease agreement
  • For landlords who have availed loan to invest on the property, rentals are best to pay back on the interest and EMIs.


  • Shorter tenancy period is a cause of concern for landlords who have difficulty finding suitable tenants.

On the other hand, Leasing is a form of agreement between landlord and the tenant, where the tenancy of the property is for a longer period of time, typically from 6 months to 3 years. In this kind of tenancy, the lease amount is paid by the tenant in one single go with no option for the landlord to make changes to the agreement terms of the tenancy during the lease period, unless and until agreed by both parties.  While, rental agreements renew periodically i.e. month-month, a lease agreement expires upon completion of the lease period.


  • Property occupancy is for a longer duration of time, hence low vacancy. Ideal for landlords who have issues finding suitable tenants episodically.
  • Lumpsum lease amount is received upon achieving tenancy over the property.
  • A tenant can’t vacate the leased property without breaking their lease, in case of such a violation, he can be held legally accountable to pay up the due rent or to find another tenant to continue with the lease.


  • Lease amount has to be returned to the outgoing tenant.
  • Leasing can be a cause of concern if the tenant is troublesome. Evicting such a tenant is not possible unless agreed upon by both parties.
  • Properties that have been given for lease are typically managed by the landlord, adding additional strain on his purse.

Every landlord has his/her own circumstances to deal with when looking for tenancy for their property. Hence, it is best for them to understand how renting and leasing are different and gauge the pros and cons of these agreement options before rounding up on one.


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