What constitutes a short term lease, how long can they be, and what do landlords need to know about managing short term lease agreements?
No two property portfolios are the same. While some landlords may manage more traditional long-term rental properties, others may own short-term rentals or vacation homes. Short-term lease agreements come with their own set of challenges and benefits, so it’s important to understand what makes them different.
There is no set legal definition of a short-term lease. However, as the name suggests, it is generally a lease agreement, signed by a tenant and landlord, for a rental period of fewer than 6 months.
These tend to be popular in vacation destinations or locations where events, festivals, and tourist attractions are located. Sometimes, they are used for traveling workers such as medical professionals. Tenants who are new to a particular area might also choose to stay in a short-term rental before putting down more long-term roots.
Short-term leases are often month-to-month agreements but can be as short as one or two nights or weeks for vacation rentals (such as those listed on platforms like Airbnb). As long as the total stay is under 6 months, it can be comfortably classified as a short-term lease.
Aside from the obvious difference in duration, short-term leases differ from long-term leases in that they typically require a more hands-on approach from the landlord. While you can typically ‘set and forget’ when it comes to reliable tenants in a long-term lease, the more frequent tenant turnover that comes with a short-term lease demands more attention.
You will likely find yourself putting more time towards cleaning and maintenance, as you need to keep the property in a constant state of cleanliness between tenancies. With tenants coming and going, you will also have to spend more time dealing with the actual written agreement.
Another significant difference between short-term leases and long-term leases is that the former generally offers more flexibility for both the landlord and the tenant. Due to the lease being shorter, landlords are able to update the terms more frequently, such as adding a pet policy or increasing the rent, as long as they give sufficient notice.
With a long-term lease, landlords may have to wait until the end of the year to change the terms. Tenants may also find themselves with more flexibility in a short-term lease as they will likely have to give less notice when breaking a month-to-month contract.
To ensure your lease agreement protects both you and your tenants, you will need to ensure that you include all of the essential information. This includes:
The easiest way to write up a short-term lease is to use a pre-existing template. Simply download, edit to fit your property (for example, you may need to add a section on pool maintenance or whether or not the guest may host parties) and sign.
Create your own customized lease agreement here.
Once you have created your short-term lease, it’s important that you store it in an easily-accessible space.
This is where Landlord Studio comes in. Aside from having plenty of useful features from online rent collection to tenant screening and accounting, the purpose-built property management software is great for storing your important documents like short-term leases. Simply upload them on our secure cloud server to ensure you never have to worry about misplacing them again.
Should you need to reference or update the lease at any time, it will be available to you at the tap of a button.
More lenient short-term leases can give landlords the freedom to update the terms more frequently and even charge more rent if the property is located in a desirable area with high demand.
Keep in mind that managing short-term leases may also lead to increased tenant turnover and less reliability for landlords. Nonetheless, when managed appropriately, they can be a great asset to your property portfolio.