Creating a Successful Lease Agreement: What Landlords Need to Know

As a landlord, you want to ensure your tenants are satisfied with their rental arrangement and everyone is on the same page. Understanding the details that go into a lease agreement can be challenging, but it is necessary. To help you finalize your lease agreement, here’s what landlords like you need to know. 

Background-Check For Tenant History

You want to only rent your properties to those you can trust. Before you have tenants sign your lease agreement, research to ensure they are who they say they are. Inquire about their reasons for moving in and their plans for the future.

Conduct a credit check for landlords and review the tenants’ financial history and background information to understand the people you’re committing to renting your units out to. Screening your potential tenants will save you a lot of headaches in the future.

Spell Out Your Terms

When you draft your lease agreement, spell out all the terms and conditions that apply to the rental property. If you’re strict on your pet policy or other rules, state them clearly with your agreement. Have your tenant initial on every page, highlighting the important information to avoid confusion later. Be sure to look up your state’s lease agreement to try and find templates to ensure that you have covered all of the legal bases. 

Make Your Contract Formal

There are many online documentation systems that you can use to create templates for your lease agreements. Make your documents and contracts official so your tenants understand that you mean business. 

Some landlords are serious about maintaining their real estate properties, so the clearer you are to tenants about your expectations. A formal document will convey the rules and guidelines followed. A good way to protect yourself and your property is to charge a security deposit upon a new tenant moving in. Doing so gives your tenants a monetary incentive to keep your property in good shape.

Make Financial Expectations Clear

Within your lease agreement, create a separate section dedicated to the financial expectations of the lease arrangement. In bold, list the amounts required by specific dates, such as move-in fees, deposits, first and last month’s rent, etc. 

You should be able to check off these tasks as your tenants complete them to ensure your finances are accounted for. Keeping your terms specific and easy to comprehend will make it clear to your tenants to learn what is expected. 

Treat Your Lease Agreement As A Tenant Reference

Creating a kind of handbook gives your tenants a lease they can refer to and take seriously. To emphasize the seriousness of your lease agreement, treat the document as a reference that your tenants should refer to when they have questions.

List the contact numbers for the teams you hire for repairs and upkeep and any other parties involved in the care and keeping of your property. Nothing is left to question if it is all listed in the lease.  

List The Fee Penalties

To ensure the best likelihood that your tenants pay their rent and follow the additional rules you’ve set out for your properties, list the fee penalties associated with failure to comply with said terms. When your tenants know what is at stake for them financially, they are more likely to stay committed to the process and stick to their end of the lease agreement. 

Leave Nothing Up To Chance

To create an effective lease agreement, spell out everything your tenants need to know within the document. Don’t leave anything up to chance, and secure the working relationship you deserve for your rental properties.