When you are a property owner, it is necessary to have a lease agreement read, signed and dated by the tenant. A lease agreement will protect you, should it ever come to the point of having to go to court with the tenant for any reason. This article will go over the information that you should contain within your lease, this will not only benefit you but your tenant as well, in knowing what you expect from them.
The lease agreement should primarily identify the property owner and the tenant, as well as the date in which the agreement was entered. The real property address should be included as well as a description of the property you are renting. For example, if you are renting a 2 bedroom house, the lease agreement should state the address and that it is a two bedroom home with or without a garage.
If the rental property is an apartment then the areas the tenant has rights to use should also be stated within the lease agreement. Additionally, if there are specified parking spaces for each tenant, the space number assigned to the tenant should be specified, as well as if there is no specified parking, such as on street parking.
The terms of the lease should be stated, for example, six months or twelve months. Any form of renewal of the lease should also be stated explicitly within the lease agreement. If you will allow your tenant to renew the lease at the end of the current lease, you must specify your conditions upon the renewal.
An extremely important aspect of any lease agreement is the rent amount. This should be stated in written words and numbers. If you are renting to a tenant for $600 per month, you should state within the agreement, “For the sum of six hundred dollars ($600) payable on -put the date here-”. State within the agreement to whom the rent is payable to and the address to which to pay it.
Any form of fee for late rent payments must also be stated in the lease agreement and when the late payment will be assessed if you intend to charge one. Additionally, state any fees for early termination of the lease agreement or failure to pay rent, including attorney fees and court costs.
If you allow pets, state in the lease agreement what type of pet(s) are allowed and how many, any type of pet deposits should be stated. You should state your responsibilities as the property owner such as fixing appliances or damage to the residence as well as any responsibilities of the tenant, such as pest control and the like.
If you provide any paid utilities to your tenant this must be in the lease agreement along with any utilities your tenant is responsible for. By providing a lease agreement, you are ensuring an understanding between you and your tenant of what will occur during the occupancy of the residence and what you expect. State how you want the property cared for and how you would like complaints to be handled.
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The real estate market is booming across the United States, especially in select areas of California as well as Las Vegas. Even the sleepy town of Boise, Idaho is experiencing record breaking primary residential development. Where ever you happen to live, you have probably noticed it’s not so easy to get into that coveted house you have always dreamed of, despite the favorable mortgage rates. So what should you do?
Lessons Learned from the Past
With such uncertainty around the real estate market, perhaps it is best to stay away from owning your own property. Many so called experts predict the housing market in the US has finally reach bubble status, and expect that bubble to burst in the near future. They may have submitted their predictions a bit early, but their advice should be considered. If we learned anything from the stock market bubble and subsequent crash of 2000, we realized frequently a conservative approach to investing serves us well when uncertainty surrounds the market.
Protect yourself and consider the advantages of renting or leasing versus buying your own home. A renter assumes far less risk by signing his/her name to a lease agreement than when closing on a house. Typically a rental agreement locks you into a contract for a short period of time, relatively speaking, during which the rental rate is locked as well. Such a contract can protect you from the downswings of the real estate market, especially the volatility frequently demonstrated by adjustable rate mortgages. Granted, as a renter you don’t stand to gain any equity in the house should the market turn up. However, you also don’t expose yourself to the violent downswings in housing values wrought by an oversaturated market. Should you buy a house now and a year later need to move to pursue a new job opportunity, what happens when your realize those inflated prices you paid for your house are not so inflated anymore, and suddenly you owe more on your house than it is worth? That is called negative equity, and instinctively you realize no good can come of such a situation. Hence renting offers flexibility, both financially and physically speaking.
Avoiding the Headaches of Ownership
By agreeing only to rent the dwelling, you manage to avoid many of the disadvantages associated with owning a house. Normally the landlord is responsible for general maintenance of the flat. Many home owners are quick to offer their stories of frustration, disappointment, and even anger when things go wrong in the house. Pipes burst, flooding occurs, air conditioning units break during the scorching summer days of July, and heating systems fail in the dead of winter. All these things can and will happen, setting homeowners back considerably. Thus, as a renter you can avoid many of the major financial investments owners must make to maintain the comfort and livability provided by a dwelling. Agreeing to a lease agreement helps mitigate the risks of living in a home or apartment.
Weighing your Options
A rental or lease agreement can offer many advantages to those of you looking for a place to live. Ultimately, each individual must decide what is right for them. Some are more than willing to bear the risk inherent to the housing market because they have a strong positive cash flow and are in a position to endure the twists and turns of the market.
Don’t be afraid to weigh your options and consider the risks of owning versus renting. For many, playing the game conservatively and waiting for housing prices to come back down to Earth will prove to be a successful strategy. There is no shame in signing that lease agreement, living in an apartment for a year or two before moving on to that house you have wanted so badly.
Adam Smith is a client account specialist with http://www.10xMarketing.com – More Visitors. More Buyers. More Revenue. For more information about lease agreements, including real estate advice and strategies, please visit http://www.oneminutemillionaire.com/affiliate/glossary/lease-agreement.asp
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