Here at RentHub property management, we often reinforce how important your screening process is as a protective element in conjunction with a rock-solid lease. However, we've not done much exploration into the other half of the equation: your lease! It would be remiss of us to focus solely on the importance of the screening process when your lease agreement is also critical to the success of your portfolio.
Sure, screening your tenants with enough care can help prevent a vast majority of the problems landlords might face with their renters. However, even when it seems that you've found an ideal resident—sometimes things just go wrong, through no fault of anyone involved in the process—or because your screening process wasn't as thorough as you thought.
In times like these, it's crucial that you, as a landlord, have an airtight lease agreement to fall back on when it comes to enforcing how you want your rental home in Dallas to be cared for; if you want to grow your portfolio, you can't rely on screening alone to protect your property. Take it from a Dallas property manager: your lease agreement is what dictates how you expect your residents to treat your rental home—not the screening process!
Writing the right lease sounds a lot easier than it actually is. You are probably aware that your lease, at its core, is essentially your agreement with your resident to provide them with housing in exchange for rent. However, the details spelled out by your lease are what that truly protect your investment properties. Plus, your agreement needs to follow all applicable state and federal housing laws.
In today's article, we're going to dive into what landlords need to know about their leasing agreements—including what kind of language to include in one to keep your rental income reliable.
A quick foreword: This article is not intended as a substitute for sound legal counsel. If you need the aid of a professional when it comes to drafting your leasing documents, work with a skilled attorney or your Dallas property manager!
The Purpose of Your Lease Agreement
The primary function of your lease is to serve as a binding agreement that defines the relationship you have as a landlord with your renters during the duration of their stay in your rental home. Not only does it outline your expectations as a landlord for your tenants, but it also delineates what your residents can expect from you. Ultimately, this transparency and inclusion in your lease not only protects you: it also protects your tenants!
If you don't include what you expect from your renters on issues like:
- How you collect rent (or acceptable forms of rental payment)
- Your approach to property inspections (including how often)
- Expectations on how your residents should treat your rental
- The repercussions, penalties, or fees for failing to uphold the lease
You'll leave them confused when you try to carry out a penalty! Sure, some actions are common sense—but not spelling it out only puts you in danger as a landlord, especially in the face of a Professional Tenant! Take the time needed to ensure that any lease you draft can successfully explain these crucial concepts before your potential renters ever put pen to paper.
Crucial Elements to Include
As a Dallas property manager, we always recommend that landlords craft a custom lease: never rely on free documentation you find online! Often these supposedly helpful "free" documents contain hidden language that can actually weaken your position as a landlord. That said, what components form the foundation of your lease agreement?
Be sure to include information that details your approach to:
- Your rent collection policy
- How you manage your resident's security deposit
- Your approach to maintenance or repairs
- How a leasing agreement might be terminated—and why
- Eviction in the event that it might be required.
Of course, these are not the only inclusions to consider in your lease. However, it helps to have the aid of either a skilled attorney or your Dallas property manager when it comes to any additional addendums. An example of this might be a pet policy (whether you're for or against) or what kind of grill you might allow on the deck of your condo. The importance, regardless, is to get it in writing.
That said, there are some exceptions when it comes to your lease agreement that are worth paying attention to if you plan to include any of these additional clauses.
The Exceptions to the Rule
There are some powerful laws in place that protect disabled renters—and as a landlord, you definitely do not want to get on their bad side. Two, in particular, are the Fair Housing Act (FHA) and the Americans with Disabilities Act (ADA). The FHA gets a bit more press when it comes to leasing agreements because it provides protection for your renters against discrimination based on:
- National Origin
- Familial Status
It also covers just about every type of housing—including most rental properties. When it comes to any of these protected classes, you need to tread carefully when it comes to your lease. A great example of this would be the pet addendum we mentioned before: even if you choose to exclude pets from your rental, you cannot exclude a service animal from your rental property.
This is just another reason why it benefits landlords to work with a Dallas property manager: they can help you build a strong leasing agreement from the ground up that takes these factors into consideration! Keep in mind that many disabilities cannot be "seen," and you can't include language that asks about the severity of a disability. Working with your property management partner can help shelter you and your rental from unintentional bias in your leasing agreement.
Create the Right Lease the First Time!
Working with an expert property manager to handle the nuances of running your Dallas rental makes being a landlord easier than ever! There's no need to get tangled up in the complex legalities of crafting the right lease when you have an ally in property management. Plus, you gain access to all the other perks that come with having an excellent property manager handling your Dallas investment!
For example, you may come to love being a landlord when you experience the passive income potential that comes with having a well-managed property. If you decide to grow beyond a single rental home and take on another investment, the expert property management team at RentHub makes that easy to do, too!
If you're curious about the income potential of adding another hands-off property with the help of your Dallas property manager, a great place to start is by downloading your copy of our FREE guide to real estate investing!