Finding an apartment and dealing with the stress of moving can be overwhelming. Understanding the different lease options, the duration of a lease, or the lease language, in general, can make it even more stressful.

While the options for leases are not super complex, it is still important to distinguish and understand what is available to you before making any decisions and before you move into an apartment.

We put together this guide to simplify the process for you and make the apartment search a bit less stressful.

This guide will not only break down the different kinds of leases available for apartments, but also help you understand the potential durations and other essential considerations in a typical apartment lease.

Apartment Lease Options

Lease agreements serve as the contract between a renter and the property owner or “landlord.”

Lease agreements are designed to break down all the specifics of the rental agreement, which most commonly will feature a duration and the amount of rent that needs to be paid.

The different kinds of leases that may be available can sometimes make the process more confusing, especially when all states may have different laws, rules, and regulations regarding leasing agreements. Learn which are the most tenant friendly states here.

Your options may vary depending on the state you plan to rent an apartment, and the landlord or property owner may also offer different options available.

Depending on your situation and circumstances, this may be advantageous, but it could also be a disadvantage. It entirely depends on what you are looking for.

So, without further ado, let’s begin by covering the three primary kinds of leases for apartments.

Most Common Apartment Lease Options: Three Primary Options

Apartment leasing options typically fall into three different categories. While the fine print of the lease agreement or contract may vary or contain additional stipulations and terms, the options typically will be similar.

No matter which option you are considering, understanding your lease is imperative. Learn how to review an apartment lease here. It will help you understand the expectations from both you and the landlord and help you prepare for any potential apartment move-in fees or other fees that may be incurred for specific scenarios or situations.

1.) Fixed Term Lease

A fixed-term lease is one of the most common types of apartment leases or residential leases. A fixed term is precisely what it sounds like.

A specific and guaranteed amount of time occupying the property for a set monthly rent payment.

Some standard options for a fixed-term lease will include the following durations:

• 6–Months
• 1–Year
• 2–Years

It is also possible that a fixed-term lease is arranged for a different duration, such as 9-months or 18-months.

The total amount of time renting the apartment is not the premise of the fixed-term lease.

The concept behind this leasing option is the guaranteed amount of time for a guaranteed price or monthly rent.

Here is a look at some of the advantages and disadvantages of a fixed-term lease:

Advantages

• Predictable and Easy to Plan For
• Rent Payment will Not Increase

Disadvantages

• More Difficult to Get Out of the Lease
• May Require Subleasing
• Penalties or All Rent Due for Lease Months Not Fulfilled are Possible

2.) Month-to-Month (Periodic Lease)

The next common apartment lease type you may encounter is the month-to-month lease or periodic lease.

With this lease agreement, you can gain a lot of flexibility and have the option to get out of the lease at any given time.

Of course, assuming you finish the current month, pay the recent month’s rent, and abide by the state laws when it comes to giving proper notice (more on this later).

The landlord or property owner will also have this ability, which could be a negative for the tenant.

One positive, even though both the renter and landlord can get out of the lease contract, is that renting month-to-month will have a provision that requires proper notice to be given to each party.

If the landlord or the renter/tenant needs or wants to get out of the current lease, each party would need to notify the other party in advance.

Proper notice is also how a property owner or the property management team could increase the cost of rent each month.

Make sure to look at your original lease agreement to find out what constitutes proper notice and what your financial responsibility would be if you ended the lease. Learn more about when your landlord can increase rent here.

Here is a look at some of the advantages and disadvantages of the month-to-month leasing option:

Advantages

• Flexibility for the Renter to Exit a Lease or Apartment Early

Disadvantages

• More of a Temporary Housing Solution 
• Rent May Increase (Only with Proper Notice Given)
• Landlord Can Terminate Lease (Only with Proper Notice Given)

3.) Sublease (Subletting)

This lease agreement is unique because it technically is not an option until you are already renting your property, which would have begun under one of two previously mentioned lease agreements.

Subleasing an apartment will require you to find a new tenant for your apartment before you can exit the original lease agreement and monthly rent payments.

Subletting allows you to transfer the original terms of the lease to a new renter. This is typically an option with apartments that require prior approval from the landlord or property management team. This is sometimes referred to as an apartment lease takeover.

The original lease agreement will typically contain language that breaks down the specifics of subleasing, what responsibilities can be passed on, and what may still be required of the original tenant/renter.

Here is a look at some of the advantages and disadvantages of subletting:

Advantages

• Allows You to Move–Out of Your Apartment Early
• Eliminates Charges or Penalties for an Early Exit from the Apartment

Disadvantages

• Depending on the Lease Agreement, Responsibility May Fall Back on the Original Renter
• Requires Time, Patience, and Potential Advertising to Find a New Tenant

When finalizing your lease, ask or get clarification about how the sublease agreement will work. This will ultimately help you understand what needs to be completed if you need to move or get out of your lease prematurely.

Now that you have a good idea and understanding of the different leasing options available when renting an apartment, we need to cover some of the other options to consider.

One option includes a joint lease or renting with a roommate.

Leasing Options with Two Renters (Renting with a Roommate)

Another option many individuals consider when renting an apartment is getting a roommate.

Why not? It is an excellent approach to help split costs and lower overall expenses.

When you opt to do this, you will have to consider two options when signing your lease agreement.

Of course, this may vary on the property owner, but most typically will have the following options:

Joint Leasing

A joint lease is excellent, assuming you strongly trust the other individual renting the apartment with you.

Here is how it works:

When signing the lease, you will be co-tenants. You and the other party renting the apartment will both be responsible for equal shares of the cost of the apartment you choose. Learn how to split rent with roommates here.

The biggest drawback of this option is how the responsibility will shift if one party does not keep its word on the agreement. Therefore, trust is usually a big part of the consideration process.

If one tenant fails to pay their share of the rent or other agreed items in the lease, the responsibility will fall on the other tenant; essentially making one tenant responsible for 100% of the cost.

While this typically will not be a significant issue for most, it certainly can happen.

With that said, individual leasing with roommates is another popular option to consider.

Individual Leasing

Individual leasing can be a great option when signing a lease to keep all parties renting the apartment responsible for their share of the rent and the space they intend to occupy.

This can be a standard leasing method for apartments on college campuses where two, three, or even four individuals rent a bedroom for a specific price.

As opposed to the joint leasing option, each party is only responsible for the room they rent and the cost associated with that space.

If one roommate or tenant does not pay the rent or uphold their end of the lease, the responsibility will not fall back on the other roommates; only the individual that is at fault in the situation.

Other Important Considerations with Lease Agreements

The common methods and options for leasing an apartment have been covered thus far. However, understanding a few other basics about leasing an apartment is still essential.

We wanted to briefly touch on some common occurrences or frequently asked questions.

Terminating a Lease Early

Prematurely ending a lease or having the desire to do so is likely one of the most common occurrences with renting an apartment.

Therefore, it is important to recap and cover what may happen and what is likely to occur if you opt to do so.

The first thing to understand is that terminating a lease early will have different outcomes depending on the state you are renting in.

For this example, we are going to cover what terminating a lease early in the state of Michigan would look like.

In Michigan, you need to understand what constitutes proper notice to end a lease and that these may vary if you are in a different state.

• Month-to-month leases require 30-days notice
• 6-month leases require 30-days notice
• Yearly leases require 30-days notice

You are also allowed to terminate a lease early if any of the following apply:

• Your apartment is deemed unsafe or violates health or safety codes
• Domestic violence has occurred and the legal system is involved (see: Michigan Domestic Violence Laws)
• Your entering active duty in the military

Again, these are examples of what would apply to an individual renting an apartment in Michigan.

It is essential to check specifics based on your location. However, this gives you an idea of what would allow you to break a lease early and what would not be permitted. Learn more on how to break a lease without penalty in Michigan here.

Apartment Property Management is Key to Consider

Property Management is a vital part of the apartment search, and you should check out what is offered in your lease agreement.

Examples of ideal things to look for in your lease are 24-hour emergency repairs and if the apartment includes utilities for you.

It can be financially beneficial to find apartments including utilities. Even if they cover only one or two of your utilities, it can be a big stress reliever.

In most situations, these details will be provided to you before you finalize a lease and will be documented in your lease agreement. Ask for clarification if you are unclear about any of these during the process of getting an apartment.

Now, we need to touch on one of your substantial rights you are entitled to during your apartment search.

Equal Housing Opportunity

The Equal Housing Opportunity refers to everyone’s right to be treated equally and fairly when searching for an apartment.

The Equal Housing Opportunity applies to homes, condos, and other living structures, too, not only apartments.

This protects against any discrimination during your property search.

The equal housing opportunity protects against the following:

• National Origin
• Sexual Orientation
• Military Status
• Age
• Gender
• Marital Status
• Disability
• Religion
• Familial Status

The Takeaway

Hopefully, after this guide, you now clearly understand the leasing options available when renting an apartment.

We also hope you understand that each option usually serves a specific individual and situation best.

It is best to consider whether you want to be tied up long-term in a lease or have the option to move without hesitation if the opportunity arises.

It is also essential to consider whether renting with a roommate makes the most sense for you or whether renting alone is the best-case scenario.

We always recommend reading all the fine print in a lease agreement before committing or signing into a long-term commitment.

Know what to ask when apartment hunting and have a strong understanding of the expectations from not only you, but from the landlord.

Lastly, if you have further questions or concerns about the apartment renting process, be sure to check out our first-time apartment renter guide here.

For those looking to rent in the Farmington Hills, MI area, be sure to check out our Botsford Place Terrace Apartments.