If you create your own lease, be sure to start with a solid legal foundation or prewritten lease, then customize the lease for your particular circumstance. Then take it to a local real estate attorney for a final legal review before using it. Make sure you understand your local and state laws, and keep your writing plain and simple.
Besides the typical protections, strive to make a ‘tenant satisfaction agreement’. You can create a lease with incentives that will let your tenants assist you with marketing your rentals. Not only will it create a better relationship with your tenants, but it will help you learn new concepts and ideas for being a better property manager.
- Be sure to include both names of a married or unmarried couple. If one tenant skips, you should be able to hold any other party on the lease responsible for the rent.
- Itemize all accepted forms of payment such as ‘personal checks only’, money orders, or credit cards and any fee for a credit card convenience charge.
- State the late fees clearly and if you are going to apply late fees prior to applying the actual rent amount.
- Specify exactly who is allowed to live at the residence and how long a guest might stay before they will be considered a ‘resident’ and not a ‘guest’. This might avoid a ‘subletting’ situation.
- The security deposit is the most contested part of the lease, so exactly spell out what your deductions will be and that deposits cannot be applied to rent owed.
- Clearly specify your obligations and the tenant obligations towards repairs. Make sure the tenant is required to have written permission to alter anything in the rental except maybe hanging pictures or posters.
Incentives for your tenants
Besides the basic lease, you can also turn your lease into valuable marketing. Your tenant will appreciate your special considerations.
- The longer they stay the better it gets. At each tenant lease anniversary, grant a financial or other type of award, provided they are on time with all of their rent payments.
- Provide incentives for your tenants to recommend you to other prospective tenants.
- Provide an incentive for your tenants to eventually own the house they currently rent, provided they remain in good standing as a tenant.
- Encourage your tenants to make upgrades to your property if they have the skills. You can provide materials and they can provide the labor
Follow these basic guidelines and you will develop a solid long lasting relationship with your tenants.
Paul Toller is VP of W G Software, Inc. developers of the Tenant File Property Management Software (http://www.TenantFile.com). He has over 20 years experience in consulting and software development for real estate. Mr. Toller also markets a product for easy creation of leases called the Lease Designer software. (http://www.LeaseDesigner.com).
Written by Per-Erik Olsen - Visit Website
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