Before you use that handwritten lease or template you find online, check out this video about the terms every lease should include. You’d be amazed at how many times I talk to landlords who represent themselves and they don’t have a provision in the lease to access the property.
Learn about this and eight other essential items every real estate professional has in every lease. Hopefully, this will save you time and energy once the tenants move into the property.
You want to include how much the amount due from the tenant is. Be sure to include the total for the life of the agreement. A twelve-month lease will state that the total rent due from the tenant is 12 times the monthly rent. For a $2500/month rental that’s $30,000.
Late fees and penalties
Rent is typically due on the first with a five day grace period. If the tenant doesn’t pay their rent by the 5th will you charge a late fee? Some landlords required that rent paid after the grace period be paid in certified funds, either a cashier’s check or money order.
The lease should specify who lives there. On the lease, you should include the names of all adult applicants and children. Typically the contract will also state how long the tenant can have house guests. Our standard lease says that guests are not permitted to stay for a period over two weeks.
Who is responsible for what. Depending on what you and the tenant have agreed upon, there are several variables to consider. Many lease agreements state that the tenant is responsible for lawn care, including removal of leaves and pruning bushes. They may also be required to change light bulbs, fuses, and filters. Will you hire someone to clean the gutters, or will your tenants be responsible for them.
You need to identify who will hold the security deposit. In the lease, you’ll determine who the security deposit payment should be made out to and how it will be returned. Here you will also give notice that the tenant is responsible for ensuring you have a forwarding address once they have vacated the property. It also states how the security deposit will be used to cover any damages and what steps will be taken if the costs exceed the amount of the deposit.
As I mentioned at the top of the post, you’d be surprised how many landlords do not include a clause granting them access to the premises. Even more surprising is that most landlords, even those with this provision, often go years without stepping foot inside their investment property. Within the lease, you should include verbiage that says how much notice will be given to the tenant before inspection or visits, which brings us to our next item.
Should you decide to rent or sell your property, you have the right to show it to prospective tenants and buyers. You or your agent may advertise and place either a For Rent or For Sale sign on the property. Depending on where you live, how far in advance you can market and show the property may vary.
There are many more terms you’ll want to include. I consider these items to be the bare minimum. A few other things to think about are minimum insurance, what to do if either you or the tenant are transferred, what happens in the event of a holdover tenant. Again, there are lots of moving parts and additional items to consider.
Don’t forget to check out our Ultimate Guide to Renting Your Home Without an Agent. If you’re thinking about renting your investment property and want to enlist the help of a professional give, me, Abraham Walker, a call at 703-539-2053 or email me.
The information provided in this video does not, and is not intended to, constitute legal advice; instead, all information and content in this video are for general informational purposes only. Information in this video may not constitute the most up-to-date legal or other information.
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About the Author
The above article was written by Abraham Walker, Your Northern Virginia Real Estate Agent, helping clients market their homes to achieve high sales with a quick closing time is my main priority. He’s the co-founder of Ask A Walker and can be found on YouTube, Facebook, and HERE on this blog.