Short Term Tenancy vs Long Term Tenancy: Explained

What is a Short-Term Tenancy?

A short-term tenancy is a type of tenancy in which the rental period is less than 12 months and spans daily, weekly, or monthly membership tenures. It is common in urban areas, university towns, and regions where demand for workspace is high.

Benefits of Short-Term Tenancy

Short-term tenancy provides excellent flexibility to tenants. It is ideal for those temporarily relocating for work and for professionals testing a new city before settling or establishing their firm in a workspace without long-term commitments. For property owners, it typically increases rental income, as short-term leases can be priced higher, especially in premium locations.

What is a Long-Term Tenancy?

A long-term tenancy typically lasts 12 months or more. It is the norm selection in most residential and commercial districts where stability is perceived. Such agreements often create a sense of permanence, making them attractive for tenants and landlords who prefer predictability.

Benefits of Long-Term Tenancy

To tenants, the long leases come with a sense of security, low monthly payments and the ability to establish a sense of home within a community. This gives the landlords the advantage of having a steady and predictable rental income without having to change tenants regularly. Long-term relationships may develop, and the tenancy will be smoother on both sides.

Which Businesses are Suitable for Short-Term and Long-Term Tenancy?

Startups, freelancers and project-based companies are often best suited to short-term tenancy. Such businesses typically require temporary and flexible office space arrangements for employees working on contractual terms. It gives them the ability to ascend rapidly without the long-term commitments, which are critical in quickly evolving sectors.

Long-term tenancy, on the other hand, is suitable for well-established businesses, such as offices or corporations, as well as family-owned businesses that prefer stability and predictability. These organisations are the ones that usually require a permanent base within which to establish operations, gain brand strength and save the continuous cost of relocating.

A long-term tenancy is both a source of financial predictability and operational stability in these kinds of businesses.

The Key Differences Between Short-Term and Long-Term Tenancy

There are several key differences between short-term and long-term tenancies, which depend on factors such as duration, flexibility, cost estimations, property ownership, and suitability.

We’ve listed and discussed each difference in detail below.

Duration

The most evident difference between short-term tenancy vs long-term tenancy is in the duration of the agreement. Tenancies can be short-term, lasting between a day and a month, or long-term, running to 12 months or more, and are usually renewed on an annual basis.

Flexibility

Short-term tenancy is quite flexible, making it an ideal option for individuals or companies with varying requirements. Long-term tenancy, however, is less flexible; tenants are bound to a specific agreement that lasts longer. Yet, most landlords offer promotional signups, rent waiver options, and discounts on long-term leases.

Cost

Short-term contracts tend to be more expensive every month, as property owners charge a premium to cover turnover and furnishing costs. Conversely, long-term agreements tend to have fixed and stable rents that remain unchanged over a specified period.