What Is Rent?

What Is Rent?

By Charles Joseph | Editor, Financial Affairs
Reviewed by Corey Michael | Senior Financial Analyst

Rent is a fixed amount of money that a tenant pays to a landlord or property owner for the use of a property, commonly a house or an apartment. The payment is usually periodic, often monthly, as agreed in the lease or rental agreement. This agreement outlines the terms and conditions of the property usage. The money collected as rent serves as income for the landlord. Several factors influence the rent amount such as location, size of the property, market demand and condition of the property.

Related Questions

1. What is the difference between rent and mortgage?

Rent and mortgage are both ways of securing a place to live, but they work differently. When you rent, you pay a landlord for the right to occupy a property. Your payments provide you with no ownership interest. In contrast, a mortgage involves borrowing money to purchase a property outright. Over time, as you make payments, you gain more ownership interest in the property.

2. Why do people rent instead of buying?

Want More Financial Tips?

Get Our Best Stuff First (for FREE)
We respect your privacy and you can unsubscribe anytime.

People may choose to rent for several reasons such as financial constraints, flexibility to relocate, avoiding property maintenance responsibilities, less upfront cost, among others. Moreover, in some metropolitan areas where property prices are very high, renting may be the more affordable option.

3. What are the rights of a tenant?

Tenants have several rights protected by law, including the right to a habitable home, the right to privacy and the right to fair treatment without discrimination. Tenants are also protected against unfair eviction and have the right to deduct certain amounts from their rent in certain situations, such as if the landlord fails to maintain the property.

4. What are the obligations of a tenant?

Tenants have the obligation to pay the rent on time, keep the rented property clean and free from damage, notify the landlord if any repairs are needed, and to follow any other conditions set forth in the rental agreement, such as rules concerning pets or noise levels.

5. What happens if a tenant fails to pay rent?

If a tenant fails to pay rent, the landlord may take legal action to evict the tenant. However, the exact procedure and rights of the landlord and tenant will depend on the local laws and the stipulations in the rental agreement.