What type of lease allows for a rent increase based on inflation?

A variable lease is designed to accommodate fluctuations in rent based on economic factors such as inflation. This type of lease typically includes a specific formula or schedule that correlates the rental payments with an inflation index or other economic indicators. This flexibility allows landlords to adjust rents periodically, ensuring that the income from the property keeps pace with rising living costs and market conditions.

In contrast, a fixed lease establishes a predetermined rental rate for the entire duration of the lease agreement, making it less adaptable to changes in the economic climate. A month-to-month lease provides tenants with flexibility regarding the lease term, but it usually does not tie rent increases to inflation. A short-term lease, while it may have a defined duration, also tends to have set rental rates that do not vary based on inflation unless specified otherwise. Thus, the variable lease is specifically tailored to account for changes in economic conditions, making it the correct answer.