There are many things to consider when deciding on a new apartment: neighborhood, floorplan, building amenities, etc. Another consideration to ponder is lease length. A standard lease in New York City is typically one year or two years long. Sometimes a listing will specify what length of leases it allows, and other times the decision is up to the tenant. But how do you know which length is a good fit for you? We’ve highlighted some of the pros and cons of signing a 1- or 2-year lease to help you make the best decision.
Pros of a 1-year lease:
- A year is a long enough period of time to determine whether or not the apartment is right for you. After 12 months, you’ll have had the time to get to know the in’s and out’s of your new space, as well as the neighborhood. If you realize that it’s not a good fit after all, you’ll have the opportunity to move without being obligated to stay for another year.
- Another benefit of a shorter one-year lease is that it allows you some flexibility in your future. Life can change dramatically in 365 days. You could land a new job in a different part of the city or country, you could be looking to move in with a significant other, or you could decide to expand your family unit. Whatever changes the future has in store, a one-year lease provides the flexibility to change with it. You can look for a new apartment closer to your new job or find a bigger home for your growing family, all without having to break your current lease and pay the associated fines.
Pros of a 2-year lease:
- The primary benefit of signing a two-year lease, especially in a place like New York City, is that your starting rent is locked in for a full 24 months. You can count on the fact that the rent you agree to will be your rent for a longer stretch of time. Those 2% to 5% increases after the first twelve months will not affect you. This is not to say that you won’t have a rent increase should you decide to renew your lease after two years. But, at least in the beginning, you’ll have a slightly rent-controlled space for a full two years.
- Another major benefit of a two-year lease is the peace of mind that it brings. Apartment hunting can be stressful and moving can be overwhelming. Knowing you’ll be in the same place for at least two years, and that you don’t have to deal with the anxiety of finding a new place, packing up and moving in, can do wonders for your mental health.
Cons of a 1-year lease:
- The main con of a one-year lease is that if you do fall in love with your apartment and decide to re-sign the lease, it’s possible that the rent will jump for the next term. The increase may be small, but it is still an increase.
- One other thing to consider is that when the term of your lease is up, your landlord may not give you the option to renew. This can happen for a number of reasons, but at the end of the day, it means that you’ll be starting your apartment hunt again after only one year, perhaps well before you were ready.
Cons of a 2-year lease:
- The primary con of a two-year lease is that you may find that the apartment, which looked so good at first, doesn’t actually work for you. Whether it’s the commute to the office or the layout of the space, you may realize that your new abode just isn’t for you. Signing a two-year lease means that you’ll either have to break the lease early or stick it out for longer than you want to, and neither of those options is ideal.
- Another thing to consider when it comes to a two-year lease is that longer leases can involve a slower negotiation process. Both landlords and tenants want to make sure that the terms they’re agreeing to are fair, which means that it may take longer to actually get into the space.
The biggest takeaway here is to decide what works best for you. Are you ok with paying a little extra if you decide to renew a one-year lease? Are you ok with staying in a place for two years which might end up not being the best fit? Does the idea of possibly moving again in one year sound ok to you? Think about these things, decide for yourself what works best, and sign your one- or two-year lease with confidence.
Once you’ve decided on your length of lease, make sure you read your lease! Here’s why it’s so important to do just that.