More Americans than ever are renting, and the total has passed more than 100 million, accounting for 34% of the population. This means that owning rental property is a smart investment and a potential monthly cash flow.
However, you’ll need to protect your investment. This means having complete lease agreements. This guide will show you five terms that your leases need to have.
1. List All of the Tenants
Every adult tenant’s personal information needs to be listed in the lease. This includes all roommates who live together, both members of married and unmarried couples, and any other adult living at the property.
This protects you as the landlord because it makes all tenant’s legally responsible for all of the terms in the lease, including the full rent amount. It also ensures you have the contact information for everyone living at the property.
2. Limit the Occupancy
Clearly define that the only people allowed to live at the property are the adults listed in the lease and their minor children. This allows you to retain control over who lives at your property.
This limit also puts a limit on how many people are living at your property. If your tenants move in unauthorized adults, you now have grounds for eviction.
3. Rent Total and Due Date
State the cost of rent and rules for late fees. This makes it clear that the tenant must pay by a specific date. Having these terms in your lease will give you the ability to take legal recourse when your tenant fails to pay.
Many states require you to take certain steps when you move to evict a tenant. The first step is that the tenant has failed to pay by the required deadline. If you don’t have the total amount due and the date it’s due in the lease, then you’ll never satisfy this requirement.
4. Repairs and Maintenance
Use the lease to outline what you expect the tenant to do. Start by referring to your state’s landlord-tenant law. It will define what repair and maintenance tasks you’re required to perform as the landlord.
This typically includes repairs for property damage or habitability. However, you can require the tenant to perform certain tasks. This could include maintaining the landscaping, cleaning, and alerting you to required repairs.
You should also include restrictions on what the tenant can and cannot do. This includes changing the appliances, painting, or installing a burglar alarm. It’s smart to require your approval before the tenant makes changes.
5. Pet Policy
With about 85 million families owning at least one pet, your lease agreement needs to have a pet policy. The easiest policy you can have in your lease is to not allow pets at all.
If you’re willing to allow pets, then you need to define what types of pets. You can get specific by defining the number, size limit, and breed that you will allow.
Check Your Lease Agreements
Now it’s time for you to check your lease agreements. Do you have these five lease terms included? If not, then you should adjust your lease so that they are included.
If you’re new to being a landlord, it can help to get started with a lease template containing all of the lease terms.
Browse our lease templates for each state to find an agreement that helps you get started being a landlord.