What is one characteristic of a Step-up Lease?

A Step-up Lease is characterized by its structured approach to rent increases, which occur in specified amounts at predetermined intervals. This means that the lease agreement will outline exact increments in rent, ensuring both the landlord and tenant have clarity on future costs. Typically, this type of lease is beneficial for tenants, as it allows them to plan their budget with a clear understanding of how rental costs will rise over the term of the lease.

This format contrasts with other types of leases where rent may fluctuate based on market conditions or remain fixed for the entire lease term. In a Step-up Lease, the predictability and scheduled increases provide a level of stability for both parties. By having specific increments laid out, tenants can adjust their financial planning accordingly while landlords can ensure their rental income grows at a consistent pace over time.