Renting out property can be a great source of income, but it definitely comes with responsibilities. That’s why you need a solid lease agreement that lists down all the lease communication between you and your tenant.
Of course, It doesn’t have to be full of legal jargon. Still, it should clearly outline expectations, responsibilities, and what happens if things go wrong.
No matter if you’ve been doing this for years or just getting started, this guide will walk you through what to include in your lease, how to keep it relevant to your specific property, and what mistakes to avoid.
So, What’s a Lease Agreement?
It’s a written agreement between you and your tenant that is final and binding for both parties. It spells out all the rental details, such as how long the tenant is staying, how much they’re paying, when rent is due, who’s responsible for what, and what rules they need to follow while living there.
A good lease keeps things clear and helps avoid misunderstandings later.
Types of Leases
There are a few ways to structure a lease, depending on how flexible you want things to be:
- Fixed-Term Lease – Usually lasts a year. It locks in the rent and the terms until the lease is up.
- Month-to-Month Lease – More flexible. It renews every month, and either side can end it with proper notice.
- Sublease Agreement – If a tenant wants to rent the place out to someone else (like a roommate or through Airbnb), this is what they’d use—but only if you allow it.
What Every Lease Should Include
Here’s a rundown of what you definitely want to include in your lease:
1. Basic Info
Start with names and contact info for both you and the tenant. Include the full address of the rental and the start and end dates of the lease.
2. Rent Details
How much is the rent? When is it due each month? How do you want to be paid—bank transfer, check, online payment? Add late fees, grace periods, or whatever else applies.
3. Security Deposit
Include the amount and what it covers. State laws vary, but some require deposits to be kept in separate accounts. Be clear about when and how it will be returned and under what conditions you might withhold part of it.
4. Maintenance and Repairs
List out what you’re responsible for (like plumbing, heating, etc.) and what the tenant needs to handle (changing light bulbs, taking out the trash, mowing the lawn if applicable). Also, explain how they should report problems or request repairs.
5. Utilities
List what’s included in the rent, if anything and what they’ll need to pay for themselves. Mention any services they’ll need to set up in their name before move-in.
6. House Rules
This is where you outline things like pet policies, smoking, noise, and shared spaces (if it’s a duplex or apartment). Be specific so there’s no room for confusion later.
7. Guests and Subletting
Can tenants have guests stay over? For how long? Can they rent the place out while they’re away? Spell that out here.
8. Lease End and Evictions
Make sure you include how much notice is needed to end the lease, what happens if either side breaks the lease, and under what circumstances eviction is possible. It’s also smart to mention that all of this follows your state’s laws.
9. Required Disclosures
Depending on where you live, you might need to include things like lead paint warnings (for older buildings), or info about mold or flood risk. If your property is under rent control, include that too.
Customize It to Fit Your Property
Not all rentals are the same, so your lease shouldn’t be either. Think of it like this: your lease is just a written version of how you want things to run at your property. Here’s how to tweak it so it actually makes sense for your setup:
- Furnished Rentals: If your place comes with furniture, jot down what’s included and what shape it’s in. Nothing fancy—just a simple list like “couch: small tear on back cushion” or “coffee table: a few scratches.” That way, there’s no confusion later if something goes missing or gets damaged, and tenants know exactly what’s part of the deal.
- Condos or HOAs: If your rental is in a condo building or HOA community, your tenants need to know the house rules. Can they have a grill on the balcony? Are there quiet hours? What’s the deal with guest parking? You don’t need to overwhelm them—just include the key stuff in the lease or attach a copy of the rules. It helps keep the peace (and keeps you out of trouble with the association).
- Multi-Unit Properties: If you’re renting out part of a duplex or a unit in a triplex, make sure to cover the shared stuff. Who parks where? Is there a shared laundry room? Who takes the trash out or keeps the yard looking decent? A quick section in the lease that spells this out will save you and your tenants a lot of back-and-forth later on.
What to Watch Out For
Even if you’ve been renting out property for a while, it’s easy to miss stuff—especially if you’re using an old lease template or just going off memory. These are some common mistakes that can trip landlords up:
- Being Too Vague: Sayings like “keep the place clean” or “no loud noise” sound fine, but they leave a lot of room for misunderstanding. What’s clear to you might be totally different for someone else. Instead, be clear. Something like “vacuum and take out the trash once a week” or “quiet hours are from 10pm to 7am” sets actual expectations everyone can agree on. If your tenant understands some other language better, you can also go for AI dubbing the terms to make them clear to understand.
- Unknowingly Breaking the Rules: Some things might seem totally reasonable, like charging a certain amount for a late rent payment, but could actually be illegal, depending on where you live. Every state has its own rules around stuff like fees, deposits, and notice periods. It’s worth double-checking your state laws or having someone with legal know-how give your lease a quick look.
- Not Updating Your Lease: Maybe you’ve upgraded the appliances, decided to cover the water bill, or bumped up the rent a little. If your lease still says otherwise, you could run into issues down the line. Try to go over your lease once a year to make sure everything’s still accurate and in line with current laws.
Before Signing
Once everything’s written up:
- Go over it in person with the tenant, especially if they’re new renters. Some tenants may not be genuine and may manipulate you with ai voice cloning to pretend to be someone else on calls.
- Make sure all parties sign it. Then, give each of you a copy, physical or digital.
After It’s Signed
Keep everything organized. Have a digital folder for each tenant, with copies of the lease, deposit records, maintenance requests, etc. When the lease is coming up for renewal, check in with your tenant early and decide whether you’re continuing, adjusting terms, or ending it.
Wrapping It Up
A clear lease agreement makes life easier for everyone. It keeps your property protected, helps your tenants understand what’s expected, and makes it way easier to deal with any issues if they come up. It’s worth taking the time to get it right.
And if you want to save yourself some admin work, there are plenty of property management tools out there that can help you handle leases, rent payments, and communication with tenants all in one place.
