How to Write Your Own Lease as a Real Estate Investor

Owning real estate can be a great way to invest your money. You can purchase property and rent it out as long as you have a strong lease or rental agreement in place with your tenants. This doesn’t necessarily need to be something drafted by your attorney since you can do it yourself if you know how to write your own lease as a real estate investor.

Instructions

1. Know the law. Before you begin writing a lease it is helpful to know what laws apply to your rental property. Writing illegal clauses or requirements in your lease can make the entire lease invalid depending upon what is actually written.

2. Be specific about the property, the tenants and other facts included in the lease. The actual residence being rented should be listed along with the people living in the property. If someone’s name is not on the lease you don’t have the legal authority to go after them and collect rent or damages even if they were living in your property.

3. List what the owner and the tenant are each responsible for. Each rental unit is different, thus it is important to specify in your lease the different responsibilities of each party involved in the lease. Utilities are an excellent example of this as the owner can include them in the overall rent price or the tenant can pay them in addition to their rental fee. Responsibilities listed out should go further than just utilities though as they may need to include lawn care, snow removal on sidewalks and other things that are not needed year round.

4. Include any restrictions you have for the property or tenant. A well-written lease should contain a section that lists out any restrictions that may apply to the property. These include areas that are off limits (ex – garage, storage shed, etc.), what can be done with the property (painting, remodeling, landscaping, etc.), whether or not the property can be subleased, what pets are allowed and more.

5. Check to ensure spelling and grammar are correct. While poor spelling and grammar do not technically make your lease illegal or unenforceable, it does make you look unprofessional as a real estate investor. The argument could be made in court that poor language skills are a sign that the lease was not properly and professionally written thus making it invalid. You can prevent this from even becoming a potential problem by using the spelling and grammar check when you type your lease on the computer.

6. Insert clause to prevent entire lease from becoming invalid in the event of an error. Having this clause is important especially if you are not familiar with all of the laws regarding rentals and real estate. Essentially the clause should state that if something in the lease is found to be illegal, it only excuses that portion of the lease and not the entire thing.

7. Let an attorney look it over. While this isn’t a necessity if you write your own lease as a real estate investor it is a good idea. Your attorney can point out areas that you missed or potential legal trouble spots that could be detrimental to your case if you must take legal action or defend yourself in court.