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In this week's 'Ask an Agent' column, the experts at TripleMint--a tech-savvy brokerage that gives buyers and renters access to the same database of listings used by the city's real estate agents, and pays their agents bonuses for client satisfaction--tackle a classic question facing renters: is it better to sign a one-year lease and keep your options open, or commit to two years, and stave off a potential rent hike?
Q: I am currently viewing apartments and I have come across a few where the landlord or management gives the option of a one OR a two-year lease. Which is better?
One-year and two-year lease options each have their upsides. For instance, when locking in a two-year lease, you are also locking in the price of rent for both years without having to worry about an increase in rent for the second year. Regardless of the market’s vacancy or comps available, you won't have to worry about not being able to afford your apartment the second year due to a large increase in rent on your unit.
That said, a one-year lease is a great option for people who are just moving to the city, or are trying out a new neighborhood. If you're not familiar with the area you are moving to, but love the apartment you found, you have first right of refusal for the unit after one year of living there. This allows you as the lease holder the option to renew your existing lease for another year, or to refuse the option for a renewal and get your security back without any financial repercussions. It gives you ample time to see if the neighborhood works with your lifestyle, and the apartment is the right fit for you. It gives you ample time to see if the neighborhood works with your lifestyle, and the apartment is the right fit for you. If you find out the super is difficult to deal with, the unit has latent defects you only realized a couple months into your lease, or you just aren’t happy with the next door neighbor, you can walk away from the unit and find somewhere that will make you more happy.
Carrie Bradshaw said, “In New York, you're always looking for a job, a boyfriend, or an apartment.” When you think of it in those terms, some people like long term relationships with stability, and enter two-year leases, while others like to date around, and see one-year leases as the way to ensure a happy life. Which are you?” - Joshua Juneau, Real Estate Specialist
“It depends on what you're looking for. Identify what your needs are, and if they'll be met by the apartment you are considering. For example, if you find an apartment you absolutely love in a convenient location, then perhaps a two-year lease might be something you should consider.
A two-year lease also might be a good fit if you know you're going to be living in a certain location for at least two years (for instance, if you're in grad school)—why not commit to a home that you love? The decision all depends on your lifestyle and situation. There are also cost benefits to signing a two year lease, as you will avoid a renewal increase if you do decide to stay, and some landlords will offer a two-year lease at a better rate. You just have to be absolutely sure that you are comfortable enough to stay for that period of time—especially since some landlords will not allow lease breaks or sublets.” - Eric Rivera, Real Estate Specialist
“A one-year lease provides maximum flexibility and minimizes the longer-term commitment. But with a two-year lease, you can often lock down a lower rental price, and not have to worry about rent going up during your second year.
Before making your decision, look at the list of wants and needs you created at the start of your search process. If the apartment checks the majority of the boxes, then I would say that the best course of action is to move forward on the two-year lease. If you're uneasy about committing for longer than a year, identify the reason why and decide whether or not you should sign a one-year lease, or look for a new apartment all together.” - Michael Bethoney, Real Estate Specialist
TripleMint is a technology-enabled real estate brokerage that is the refreshingly simple way for New Yorkers to buy, sell and rent apartments.