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Lease vs Rent: What is the difference?

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Should you lease your new office space or rent it? Not quite sure? Well, in this article, we’ll understand the difference between lease and rent. Also, find out when to lease and when to rent, or you should lease and pay the rent.

So, to blow the confusion away, let’s dive right in.

What is a lease?

A Lease is an agreement that you and your landlord would sign when you’re taking office space from him/her. It is a legal bond that clearly defines your period of stay in the property and the charges you would be bearing in case of any damage or pre-closure of your agreement.

It contains the following vital details.

  • Information about you and the landlord
  • The amount you’ve paid as the security deposit and charges you’ll have to bear.
  • Information about the area or space you’re leasing.
  • Information about the charges you’ll have to bear for the extra amenities you’re taking, like parking.
  • Information about the damages and repairs.
  • And of course, the length of the agreement and how much you will be paying monthly.

Suggested Read: How to sublease your office space?

What is the rent?

Rent is the amount you pay every month for the lease you’ve signed with your landlord for the office space you’re taking. So, now you know, rent is paid every month after signing a lease agreement. Often people get confused and use the terms interchangeably, but they’re two different things under the same umbrella.

Let’s look at the various types of leases.

Types of leases

There are two of them.

  1. Fixed lease: A fixed lease is an agreement that clearly defines your period of stay in the property. It could be anything from 1 year to 5 years or more. After the lease period gets over, you can either renew it or leave it as is.
  2. Monthly renewal lease: This is a unique type of lease because it gets renewed every month. People choose this type of lease when they’re not sure about their stay in the property. It helps both tenants and the landlord.

Also Read: How much office space per employee do you need?

What type of lease should you choose?

Choosing the type of lease depends on your requirement. If your business has already scaled, then you should go for a fixed lease. It’s going to cost you less because the landlord is getting fixed money for a longer duration. So, he will give you a discount on the rent.

But if you’re blooming, then going for a monthly renewal lease is your best go.


Now that you know the difference between lease and rent, it should be easy for you to lease your new office space. Always remember, you must read the fine print with eyes wide open.


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