Last Updated: 26th June, 2024

When it comes to finding a place to live in Australia, if you’re not buying a home, renting and leasing are two terms that will come up a lot. But what do they mean, and what are some of the key similarities and differences between them?

Homeownership is often seen as the great Australian dream, but the reality is that one-third of us rent where we live. Renters tend to be under the age of 35, and renting can be seen as a stepping stone to buying a home, while for others, renting is a convenient and flexible life choice. As plenty of us will experience life as a tenant at some stage, it’s worth having an idea about the distinction between renting and leasing.

What Is Renting?

Renting involves entering into an agreement with a landlord to make periodic payments in exchange for living on their property. Typically, rental agreements are short-term and offer flexibility to the tenant.

Types of Rent Agreements

  • Short-term Fixed Agreements: These typically last 6-12 months and are the most common type of rental arrangement. They offer a balance of stability and flexibility for tenants.
  • Periodic (Month-to-Month) Agreements: These agreements do not have a set end date and continue on a month-to-month basis. They can be terminated at any time with proper notice, providing the highest level of flexibility but less long-term security.

What Is Leasing?

Leasing is a more formal contract in which the tenant agrees to occupy the property for a fixed period, often longer than a rental agreement. This offers stability but less flexibility than renting.

Types of Lease Agreements