Are you thinking about renting out a property in Philadelphia? You should go for it! Rental properties are a great investment. They allow you to earn a steady passive income while also growing your wealth and equity over time. Moreover, due to the city’s strong local economy and world-class amenities, there is a high demand for rental properties all across Philly!
When leasing a property, it’s important to remember a crucial rule: never rely on verbal agreements alone. While speaking with tenants can be a great way to ensure that both of you agree to the lease terms, spoken agreements are impossible to enforce.
A strong lease agreement is the best way to protect a rental property from unpaid rent, property damage, and unauthorized occupants. If you need help with writing your rental agreement, you’ve come to the right place! In this article, the team at TrustArt Realty will go over the key information all rental agreements should include.
1. Full Names of You and Your Tenants
A lease is a legally binding contract. As such, it should include the full names of all parties involved, such as the landlord, any property managers, and all tenants over 18. By making sure that all adult tenants are included in the rental agreement, you make them responsible for covering rent and maintaining the property.
2. Price of Rent and Due Dates
It’s easy for new tenants to forget the price of rent or the due date. If you want to avoid this, you should specify the rent amount and due date on your rental agreement. This doesn’t mean that you should list out all the due dates. Simply stating that rent should be paid on the first or before the fifth of every month, for instance, should suffice.
3. Full Property Address
To avoid confusion, it’s important to disclose the full property address on the rental agreement. Additionally, if you own a multi-family property, it’s a good idea to include a brief description of the leased unit and any other areas the tenant has access to. This way, you’ll prevent misunderstandings and foster a more positive relationship among all tenants.
4. Duration of the Lease
Your rental agreement should specify the start and end dates of the tenancy. This will help prevent holdover tenancies, as well as serve as a reference for when tenants must move. If you’re renting your property on a short-term basis, whether on a weekly or monthly basis, it’s important to also explain whether the lease will renew automatically after each period or whether a new lease needs to be signed at the end of every week or month.
5. Late Fees and Grace Periods
There’s nothing more annoying than having to chase down tenants because they haven’t paid rent. A great way to encourage timely payments is by enforcing late fees. Keep in mind that the acceptable grace period and amount of fees need to be clearly outlined in the rental agreement. Otherwise, you won’t be able to enforce these terms.
6. Tenant Maintenance Responsibilities
While the bulk of the work falls on landlords, tenants are also responsible for maintaining the property. This includes regularly cleaning the property, taking out the trash, mowing the lawn, making minor repairs, and informing the landlord or property manager of any maintenance issues that may arise. To avoid confusion and ensure tenants keep their end of the deal, you must outline their maintenance responsibilities in the rental agreement.
7. Security Deposit Policies
Disputes regarding deductions to the security deposit are incredibly common. To save yourself from headaches, it’s best to write clear security deposit policies. Make sure your rental agreement specifies the amount of the deposit, where it’ll be stored, any potential deductions that can be made, and the expected refund timeline. This way, tenants will know from the get-go what they must do to get their full deposit back.
8. Extra Addendums
Addendums help you clarify rules and responsibilities beyond the standard rental agreement. Here are some common addendums you can include in all your leases to better protect your property:
- Pet Policies. Specify whether pets are allowed on the property. If they are, specify the number, size, and breed of pets allowed, as well as any applicable pet deposits and additional rules for tenants.
- Noise Regulations. To prevent noise complaints, you can specify whether there are any quiet hours and the rules for loud activities, such as parties. Additionally, outline the penalties for violating such noise regulations.
- Subletting Policies. If allowed, outline the conditions for subletting, such as screening potential tenants, paying additional fees, and getting your approval beforehand.
- Smoking Policy. States whether smoking is permitted and any rules or restrictions for doing so.
- Parking Rules. Specify where tenants are allowed and not allowed to park. If you own a multi-family house, consider including the number and location of the assigned parking space to avoid disputes among tenants.
- Renewal Requirements. Specify the requirements for renewing the lease, such as additional screenings or deposits.
- Guest Policies. Outlined restrictions on having guests over, such as maximum duration of stay and notice requirements.
- Move-Out Procedure. Detail cleaning expectations and deposit return policies after move-out.
Bottom Line
If you’re thinking about renting out a property in Philadelphia, PA, you should learn how to write a strong rental agreement. By outlining your expectations and key terms on the lease, you’ll prevent disputes, reduce liabilities, and ensure tenants understand their responsibilities.
If you need help writing or reviewing your rental agreements, contact TrustArt Realty!
