Renting a property can be a lucrative enterprise, and a good landlord is one who knows as much as possible about it. A landlord should have strong people skills, great business sense, and a keen ability to stay organized. Udemy offers a variety of courses on the business end of property management. If you are just starting out in the rental property game check out Udemy’s course on how to identify, buy, and manage single-family real estate. It will give you all the basics you need to dive right into the landlord game.
A major component in renting out a property is drafting a strong and clearly worded rental agreement. There are many types of rental agreements between landlords and tenants. These include long-term and short term-leases, subleases, and more. Rental agreements are a type of contract, drawn up between the landlord and the tenant. Once signed by the landlord and the tenant the rental agreement (also called a lease) become a binding document between the two parties.
Though you can obtain a lawyer to do the drafting for you, it is also possible to learn the ins and outs of the law itself. Udemy’s course on The Laws of Contracts in 60 minutes is a fast track course that can help you get a better understanding of how to go about drawing up your own contracts for your rental business.
Understanding the Month-to-Month Contract
One particular rental agreement is a month-to-month contract. Whereas a long-term rental agreement is for a set period of time as specified in the rental contract, a month-to-month rental agreement is one that does not contain specific time limits. In many instances month-to-month rental agreements are done verbally. However this can be a risky venture because in a court of law it is very hard to prove a verbal agreement as binding. If you are going to create a monthly rental agreement, it is suggested you put it in writing, with all the key information highlighted so there will be no confusion between you or your tenant about the requirements set forth.
A month-to-month rental agreement should always start with the most basic information. This includes both the names of the landlord and the tenant as well as the address of the rental property. It should then stipulate the monthly rent as well as any utilities that are included in the rental contract. A section that stipulates what happens when failure to pay rent occurs is necessary as well. The language here should be clear and concise. It should detail the period of time after the rent is past due when penalty charges will be accrued. The amount of penalty is up to the landlord but it needs to be written into the contract itself.
Components That May be Included in a Lease
Other variables to be included are rules regarding occupancy and subletting. It is up to the landlord whether they allow the tenant to sublet to others or not. It is also within the landlord’s rights to put a limit on guests or subtenants if they so desire. Permitted items such as pets, appliances, or vehicles may be included in these variable sections as well.
Often a refundable deposit can be part of a month-to-month rental agreement. This is referred to as a security deposit and is usually paid along with the first months’ rent after a contract is signed. If you take a security deposit it is important to establish in writing any instances that would result in the inability to return the security deposit in full. Some reasons may be damage to the property or failure to pay rent for an extended period of time, resulting in eviction.
A month-to-month rental agreement can be more convenient for a variety of reasons. However, that should not mean the agreement should be void of extra sections, which will protect the safety and stability of the property. Putting an ‘interest’ section into the agreement will allow the landlord to stipulate the specifics required of a tenant. This can include inspection requirements before the termination of the agreement, added deposits for items like pets, or the details regarding maintenance costs.
Replacing damaged items can become tricky if not put into the agreement. Of course there will always be wear and tear costs when it comes to renting a property. That is a natural outcome of renting a property. Conflict can be easily avoided in severe instances when major damage occurs if information regarding where responsibility lies is clearly stated.
Even though the landlord drafts the agreement, the best contracts offer an equal amount of security for the tenant as well. Clearly detailing privacy policies for the tenant is a sure way to make sure they remain happy and feel safe in the property they are renting from you. Including language that explains exactly when and how a landlord may enter the property is very important to maintain a healthy landlord/renter relationship. Also making sure to decide on a specified amount of time a tenant may need to vacate the premises will also make them feel more secure.
Understanding the mindset of a tenant and what they may be expecting is a great way to stay a step ahead and be a strong and responsible landlord. Take a look at this new apartment checklist to get a strong grasp on what is being considered by the other party in a rental agreement.
Writing a month-to-month agreement can be very technical. Clarity and specificity are needed so that there is little if any confusion between parties. To understand the best style of technical writing you should consider taking Udemy’s Technical Writing Course. It can help you understand the right language to use, the best software programs and templates available and much more. If you’re really looking to take the bull by the horns you can take Udemy’s Rental Property Training Course. In it you can earn 3 CPE credits while learning the ins and outs of accounting to help you track your earnings and pay your taxes correctly.
Taking the leap into property management is a great way to earn money and grow a personal business. Whether your starting out with your very first property or trying to get a better handle on managing property you already have Udemy’s course on managing single family homes is the best place to start. Good luck, and happy renting!