It can feel like a simple exchange when you first bring a renter into your investment property. They agree to a rate, you assume they'll keep the place nice, they sign a lease, and you're done. However, seasoned investors know that it's rarely this simple to put a strong lease in place and for renters to follow it!
The foundation of your relationship with your renters is a strong residential lease agreement. Taking it seriously and understanding it thoroughly can keep you from hitting snags with renters. So, what is essential to know about creating strong lease agreements? Here are some factors that should be top-of-mind as you work with the best property management company Eldersburg offers, your legal counsel, and any other people you partner with as a property owner.
Thankfully, owning a rental property business doesn't mean you have to go to law school and dig into dusty books full of statutes for the entire history of your state. However, taking your Maryland lease agreement seriously enough to read up on critical clauses is essential—even if they don't make sense to you! Just an hour or two with a real estate lawyer and a property manager can help you review your standard lease agreement, tweak anything that could put you in a legal grey area, and make sure that you're ready to start that relationship.
One of the big things you need to know when setting up a rental agreement is whether you're asking for a long-term lease or a month-to-month lease agreement. If your renter has a different expectation about the level of commitment than you do, there could be severe conflict during the lease term. Spelling out the potential for rental rate changes, when they must pay rent, the length of the lease, and the consequences for breaking the lease are essential policies to include in the document.
Other key policies should be easy to understand and ironclad, without room for interpretation. For instance, the lease should clearly state the security deposit amount and how you'll decide how much a renter gets back after a move-out inspection. A comprehensive agreement also has a policy on pets and smoking on the property, complete with consequences for breaking that rule. Residential property owners must also make sure that the renters understand occupancy limits, including how that affects you as a property owner and the consequences for them if they exceed the occupancy or let people move in that aren't on the lease.
Working with an Eldersburg property management company can be a valuable way to learn clauses that should be in your lease. Property managers have plenty of experience throughout a variety of leasing situations to help property owners customize a standard lease agreement for the better.
While the lease should be relevant to your interests and needs as a landlord, another primary source of key information is Maryland lease and rental laws. Rental property law does change over time, and renters' rights are put into law to make sure that affordable, decent housing is available with reasonable protections in place. The best property management companies and your legal counsel can weigh in for compliance with the law and to avoid potential problems with residents.
Grey areas in your lease may feel like it gives you options, but clauses with room for interpretation can actually weaken your rental agreement and case if you have to go to court with Maryland tenants. A customized, legally-sound residential lease agreement protects your properties and rules enforcement efforts if a renter tries to take you to court. Real estate investors with airtight leases can often avoid lengthy court battles and reduce the potential for misunderstandings with residents.
Spelling out policies, procedures, and fee structures in a legal document can feel like a daunting task to accomplish before your renter even moves in. Whether you're a new investor or a seasoned rental property owner, it can be easy to overlook critical aspects of a lease in the hustle of tenant screening and the make-ready process before renters move in. Experienced property managers can help you walk through the lease agreement and ensure that it delivers excellent protection for your property and income.
If you're currently dealing with a lease that renters won't follow, or it's almost time to create a new lease for new renters, reach out to Renters Warehouse BW Metro. Our full-service property management helps investors catch costly mistakes and avoid misinterpretations with a strong rental agreement.
Want to jump in and get started? Download our free resource, the "How to Create a Custom Lease Agreement Checklist," today!