A lease is generally used for landlords who prefer the stability that comes with locking in a tenant for a specified period of time. If you have a mortgage payment to meet, having this set amount of income can help you budget your expenses. Most tenants are familiar with long-term leases, and will not have a problem committing.

Rental agreements differ from leases in a number of ways. Standard rental agreements are month-to-month, and there is no set period of residence. Both the landlord and tenant are free at the end of each 30-day period to make changes to the rental agreement, subject to any rent control laws.

These changes may include a rent increase, modification of terms of the rental agreement, or a request to vacate the property. However, in most states, both landlord and tenant are required to give 30 days' notice before any changes can be made. If your state does not require a notice, you are free to change any part of the rental agreement at your discretion.

Rental agreements are useful for landlords who are having difficulty attracting new tenants, especially if they are in areas that cater to students or professionals on the move. They appreciate the freedom a month-to-month agreement provides, and landlords who offer these arrangements may have an edge over landlords who require long-term leases.

A rental agreement is typically auto-renewed without notice after each 30-day period has elapsed, as long as neither party has stated that the tenant will vacate the premises.

Before you rent out your property, you will need to take into account the differences between a lease and a rental agreement. This will allow you to make the best decision for your needs.