Lease vs Rent - Hindi - YouTube

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Namaskar my name is Mukul and welcome to asset Yogi

Friends, in this video we are going to discuss a very simple yet very important topic.

What is the difference between lease and rent

For example, Should we sign a lease agreement or a rent agreement on the house we want to take on rent?

If we want to rent a car in our business

So we will call it on lease or we will call it on rent.

So many times this kind of confusion occurs

In this video, we will try to clear this confusion

What is the difference between lease and rent

And what are the advantages and disadvantages

Where you should use Lease where you should use Rent.

So keep watching this video.

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First of all, let us understand the difference between lease and rate.

What is the main difference between them?

See lease is always used for the long term.

If you rent any assets, which you are taking for more than 12 months

So you will use the lease term, Their lease agreement signed

Or we can also call it to lease deed

For example, if you take an office building for your business on rent

Then you sign a long term lease

For 3 Years, For 4 Years, For 5 Years or 10 year

There can be a 15-year lease agreement.

Similarly to the airline industry

Leases are used a lot in the airline industry.

Aeroplanes are taken on lease for 9 years and 10 years.

Similarly, in the office where a lot of manufacturing work is done.

Equipment is rented there.

Sometimes construction companies take some equipment for the long term leases

So these are some examples where the lease is signed.

Assets are taken on lease for long term

Now on the other hand if we talk about rent

So if you rent any assets for less than 12 months,

So we call it renting.

For example, like you hire cab of Ola or uber

So that you hire for a few minutes or a few hours, or a day

Or there are some apps like zoom car where you can hire a car for 1 to 4 days

If you are also hiring a car for your office

For one week or month so we will call it renting

Similarly, if I take an example of construction business

If you have hired a crane, let's say for a day,

Or for 15 days, so you will call it renting

Or if you also do a house agreement

so you must have seen It is an 11-month agreement.

That is also a rent agreement

So usually a lease is always signed for the long term.

And when you rent something for a short period,

so it's called renting

But yes these terms sometimes are used interchangeably

You can also hear a 6 months lease at times.

And you may also get to hear a 2-year rent agreement

But if you see on a broad level, so the lease is always signed for long term

Usually for 12 months or more than it

And rent agreement is always signed for less than 12 months

Now let's try to understand them in more details

And because the lease is signed for long term

So usually the Lessee who is taking the asset for rent

He is also responsible for its maintenance

Whereas if you rent, Like if you took a car on rent

If you have taken ola or uber, If we take the example of these

So the maintenance is done by their owner.

So we can say that Leasee is responsible for the maintenance in the lease.

that is, the one who is renting it,

And in renting it is the responsibility of the owner for the maintenance

Now let us understand the negative and positive points of both.

See because you are signing the lease for the long term,

That means you have locked its price if you have taken an office building or a house for rent

So you locked its rent for a long-term.

You are sure that the rent will not increase all of a sudden

But in the case of renting, the rate can also increase every month.

Suppose if we talk about prices of ola and uber

So even daily the prices fluctuate.

And similarly, if you take a car for one month

So your rent for 1 month has come but,

But if you take it in the next month, then its rent may increase.

Even if the rents increase in the house,

So the landlord says that either you vacate my house or else increase the rent.

So there is more flexibility in terms of renting,

But in the case of the lease, we can say that the surety is high and the security is high

For lesser and Leasee

And the second thing you have to take care of,

That the agreement in renting can get terminated very soon.

The agreement can also be terminated by giving short notice.

So if we talked about house agreements,

usually, a 1-month clause is given so that agreement can break by the landlord

and tenant by giving 1-month notice

But this does not happen in the case of lease.

Because if in the middle of the lease,

Let's say If the lease is for 10 years, so if the Tenant or Landlord breaks it in the middle,

So the penalties are maintained quite high,

There could be a penalty of 6 months rent, there could be a penalty of 1 year.

Apart from this, a clause is also inserted in the lease that

The Leasee , ie one who is renting it

He can also become an owner in the future,

If he makes the payment at the value of asset of that time

Which is also called as higher purchase system

But this is not possible in the case of renting

In the case of renting, the owner is always the owner.

Tenant can't become owner right away

Even in the rent agreement, no such clause is written

So this is some difference you should keep in mind

If you are renting any assets.

Whether you should take a lease or take it on rent.

If your requirement is short term, then you can rent

Maybe its rent is a bit high if you are taking it on rest for the short term

But if you don't have its use after some time,

So there is no use in taking it for a long time.

On the other hand, if you want to use an asset for a long term

but you don't want to buy it

So lease can be a very good option for you.

there is security for lesser and Leasee

That the asset has been booked for such a period.

And it becomes advantageous for the tenant that,

if we say for Leasee, So the price gets locked for him

So if you rent an asset in the future keep all these things in mind.

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