Education and news for smart DIY landlords!
A lease agreement is a legal contract between a landlord and a tenant. It highlights their obligations and responsibilities, and ensures their rights. One can think of the lease as a guide to prevent issues from arising. If they do, both parties can deal with them accordingly.
Having a good lease is important. It sets up a landlord for success! The question is, are you able to tell that a lease is good?
Landlords should always rely on a written lease. It's not enough to verbalize your expectations to your renters and expect them to be responsible. A written lease ensures clarity and certainty. It reminds both parties what they agreed upon.
You will find many pre-made lease templates that will allow you to save time from creating one from scratch. (Here at Landlord Prep, we offer a package of landlord templates which include a residential lease, rental application, tenant welcome letter, and more!)
Make sure that you customize your lease so that it reflects your specific rental terms. You may find that you need to include additional rules, such as a pet deposit (if you run a pet-friendly rental) and online rent payments. If the pre-made lease does not have these rules, feel free to add them yourself.
While every lease is unique, it should always reflect the following:
It's important for your lease to be as thorough as possible. This prevents misunderstandings between you and your tenants. For example, it's not enough to state the amount of rent to be paid each month. You should also state when it's due and the method in which your tenant pays you. Most landlords charge late rent fees, so include a late fee clause.
Are you 100% confident that your lease is legally sound? To ensure this, hire a real estate attorney to review your lease. An attorney will help spell out your desires and requirements on the lease correctly. Your attorney should also be well-versed in your state law regulations.
Ultimately, a good lease agreement will ensure a smoother rental property business. It is your tool for protection against legal troubles. Also, it's best to offer a lease renewal about 90 days before it expires. Lastly, make sure that you keep extra copies of the lease!
If you’re ready, make Landlord Prep your go-to resource for landlording education. Here, we offer a complete DIY landlording course to get you on the right track. Join our academy today. If you want, you can check out Flavia’s real estate investing webinar first!