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Long-term Vs. Short-term Lease Agreement – Which One Is Better?

By Author: Carl Glendon
Total Articles: 106

While getting an office space on lease, one of the commonest questions is whether it is the Long-Term and the Short-Term Lease Agreement. It is particularly essential for small businesses – the failure or success of which could be dictated as least partly by the decision. Although there is no proper answer to this, given the fact that the needs of each company are varied, there are specific benefits of each type of agreement. When a business owner analyzes these advantages carefully with a commercial broker’s assistance, he can choose the best possible option.

Benefits of Long-Term Lease Agreements

Predictability is a benefit. Tenants signing this kind of agreement know the amount of rent increment for them every year, irrespective of the conditions of the market. Companies, by comparison, sign a short-term contract when they find their real estate expenses going up each year and impeding growth.

There is higher stability. In case you come across your dream spot, with a long-term lease – generally 5 years or higher – makes sure that you can stay put there for a long time, even in case your building gets sold.

There are concessions / improvements for tenants available as well. Often, landlords are more ready to offer tenant improvement allowances as well as other concessions such as no rent payment option to tenants signing long-term rental agreement.

Benefits of Short-Term Lease Agreements

There is more flexibility. Tenants who have to shift altogether to a new area or scale down / up can do that easily with the aid of a short-term lease. Long-term tenants, conversely, would either have to make lease transfer to some other tenant or sublease, for relocating.

It is assessed that 8 of 10 businesses tend to fail in just 18 months of setting up. While long-term leases put tenants in peril for rent not being paid in case they ever wind up business, short-term agreements let business owners reduce losses and go on even if their business does not get off ground. For more information about a free marriage separation agreement form, please visit this website.

Which One to Go For?

The choice depends on various property owners’ individual situations. However, you can get more income security, ease of finding tenants and other benefits with a long-term lease agreement.

Author Resource:-

Carl writes often about legal drafting, rental lease agreement, marital separation agreement and help the people in such needs. You can find more about legal separation agreement blog. Please visit this website for more info about how to file for legal separation in TN.

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