A landlord is offering new tenants the ability to lock in a two year lease at a fixed monthly rent. Should I do it or stick with one year?

This depends on multiple factors, but it really comes down to certainty that you’ll be happy living in the same apartment for the next two years and how the market and economy will be one year from now (which is difficult to determine).  If you’re comfortable with committing to a two year lease and the two year asking rent is almost the same (or the same) as the one year asking rent, then it may make sense to consider the two year in order to lock in the same rent for both years.

Historically, landlords generally attempt to raise rents every year, so at lease renewal, you can expect a rent hike (anywhere from 2-6% on average, but may be higher).  The amount of the rent increase could be minimal or significant and is based on market factors, the economy, the landlord and building vacancy.  Therefore, it’s not guaranteed how much you can benefit from taking a two year lease, but if you are willing to do so, it may be helpful in securing a better long-term deal, especially in a decent to good economy.

Note: During the recession years of 2009-2010, rents actually dropped and many tenants were able to negotiate better rates at lease renewal.  Although tenants should normally expect to maintain the same rent or experience a rent increase at the time of lease renewal, there are certain circumstances where a lower rent could be negotiated.