{"id":166128,"date":"2024-02-07T13:44:46","date_gmt":"2024-02-07T20:44:46","guid":{"rendered":"https:\/\/www.biggerpockets.com\/blog\/?p=166128"},"modified":"2024-07-13T06:04:48","modified_gmt":"2024-07-13T12:04:48","slug":"dont-use-free-lease-templates","status":"publish","type":"post","link":"https:\/\/www.biggerpockets.com\/blog\/dont-use-free-lease-templates","title":{"rendered":"Don\u2019t Skimp: Using a Free Lease Template Will Cost You More in the Long Run"},"content":{"rendered":"\n\n      <iframe loading=\"lazy\" frameborder=\"0\" height=\"200\" scrolling=\"no\" src=\"https:\/\/playlist.megaphone.fm\/?e=BIGPOC6628265039\" width=\"100%\"><\/iframe>\r\n  \n\n\n\n\n<p><span data-preserver-spaces=\"true\">One of the questions we see on the&nbsp;<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.biggerpockets.com\/forums\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">BiggerPockets forums<\/span><\/a><span data-preserver-spaces=\"true\">&nbsp;over and over again is, \u201cWhere do I find a good lease document?\u201d&nbsp;<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">When people ask that question, they really don\u2019t mean that they want a&nbsp;<\/span><em><span data-preserver-spaces=\"true\">good<\/span><\/em><span data-preserver-spaces=\"true\">&nbsp;<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.biggerpockets.com\/blog\/what-to-include-in-a-lease-agreement\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">lease document<\/span><\/a><span data-preserver-spaces=\"true\">. What they mean is they want a&nbsp;<\/span><em><span data-preserver-spaces=\"true\">free&nbsp;<\/span><\/em><span data-preserver-spaces=\"true\">lease document.<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">The truth is that leases are really the most important investment you\u2019ll make when starting your career as a self-managing real estate investor. The free leases that self-managers share are likely to be the most expensive option you\u2019ll find in the long run.&nbsp;<\/span><\/p>\n\n\n\n<p><em><strong><span data-preserver-spaces=\"true\">By the way, a <a href=\"https:\/\/www.biggerpockets.com\/membership-types\" target=\"_blank\" rel=\"noreferrer noopener\">BiggerPockets Pro Membership<\/a> gives you access to unlimited attorney-approved lease documents for every U.S. state<\/span><\/strong><\/em><span data-preserver-spaces=\"true\"><strong>.<\/strong><\/span><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span data-preserver-spaces=\"true\">Why Is a Good Lease Important?<\/span><\/h2>\n\n\n\n<p><span data-preserver-spaces=\"true\">The good news is that the ROI on an excellent lease is huge. The bad news is that you can\u2019t measure it, which is likely why many new investors don\u2019t want to spend any money on a lease, but that is a huge mistake that can have disastrous consequences.&nbsp;&nbsp;<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">Think of it this way: If you are finally pulling the trigger on your first deal, you\u2019ve likely spent hundreds, maybe thousands of hours learning, researching, walking, and underwriting properties. When you get to the point that you are ready to rent it out, the lease is the only thing you have protecting your rights and property as an owner.<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">Is this really the time to cut corners? Are you really going to trust your entire life savings to something that popped up on a subreddit in your Google search?&nbsp;<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">And please don\u2019t fall for the \u201cmore is better\u201d fallacy when it comes to leases. There\u2019s that guy your aunt\u2019s hairdresser\u2019s neighbor knows who owns four rental properties and has been doing it for 30 years, and he\u2019s \u201cseen everything.\u201d Heck, he is so experienced that his lease is 28 pages long and filled with clauses like \u201ctenant cannot use the garage to manufacture large quantities of illegal drugs for sale on the black market.\u201d&nbsp;<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">There are already laws in place to protect property owners from that type of thing\u2014putting specific clauses in your lease is just amateur hour. There\u2019s a much better way.&nbsp;<\/span><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span data-preserver-spaces=\"true\">You Need an Attorney: Here\u2019s Why<\/span><\/h2>\n\n\n\n<p><span data-preserver-spaces=\"true\">Head to a local meetup or get on a local investor\u2019s forum and start asking for landlord\/tenant attorneys. These attorneys are specialists in contract language, current legal cases, local trends, and the political climate that can and will impact your market experience.<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">They are different from real estate attorneys or business attorneys. They specialize specifically in understanding the balance of power between a tenant and landlord and how state and local laws influence that balance.&nbsp;<\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.biggerpockets.com\/blog\/what-is-a-landlord\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">The art of being a landlord<\/span><\/a><span data-preserver-spaces=\"true\">&nbsp;is so much more complicated and nuanced than a random lease that you find online can possibly address.&nbsp;<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">Meet with at least a couple of these attorneys. Will they charge you a consultation fee? Probably. Will it be worth it? Absolutely! Dare I say it will be a drop in the hat compared to what you\u2019ve already spent on projects, learning, and acquisitions.&nbsp;<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">First, when, not if, you have an issue with a tenant, you\u2019ll need some sort of relationship with an attorney. As tempting as it may be to pop on the BP forums and post your question, you don\u2019t know who you are getting answers from or what their experience and ethics are like.&nbsp;<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">In addition, every state and city has its own rules regarding numerous details in what is or is not legal in how you interact with your tenant. Reaching out for simple advice becomes much easier with an attorney with whom you have a relationship. If you have a simple, nonemergency question, you can often email and get a quick answer from someone who knows their stuff.&nbsp;<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">But the&nbsp;<\/span><em><span data-preserver-spaces=\"true\">real&nbsp;<\/span><\/em><span data-preserver-spaces=\"true\">value comes in that lease that they\u2019ll give you at your consultation. That lease will have infinite value for you. For one, you know that it complies with local laws and regulations, so you\u2019ll have better protections than a generic lease. Secondly, when you do have a problem (and you&nbsp;<\/span><em><span data-preserver-spaces=\"true\">will&nbsp;<\/span><\/em><span data-preserver-spaces=\"true\">have a problem at some point), that attorney will know your lease inside and out and be prepared to address your issue immediately and defend your rights in court if necessary.&nbsp;<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">You don\u2019t get these benefits with a generic \u201cfree\u201d lease. In some cases, your lease may not be defensible in court, and when you are in a pickle, you might not find a<\/span><em><span data-preserver-spaces=\"true\">&nbsp;<\/span><\/em><span data-preserver-spaces=\"true\">skilled attorney willing to help. If you do find someone willing to help, you\u2019ll have to pay them to review and analyze your lease anyway, which will be more costly than an initial consult would have been.&nbsp;&nbsp;<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">So many landlords don\u2019t realize that the lease isn\u2019t there solely to protect you; it protects the tenant\u2019s rights as well, and rightly so. As landlords, it\u2019s our obligation to provide tenants with safe, clean, and reasonable accommodations. It\u2019s a two-way street\u2014we hold up our end of the bargain in the expectation that they will do the same, communicate effectively, and pay on time. The lease isn\u2019t, and shouldn\u2019t be, a weapon a landlord uses against their tenants.&nbsp;<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">Most municipalities have laws in place that protect tenant\u2019s rights. These laws, in many cases, are there for a reason. Landlords have a reputation for trying to create leases and relationships that strip tenants of their rights. If your lease violates any local or state laws as far as what your tenant\u2019s rights are, it won\u2019t be enforceable in court. You are so much better off just working with a professional from the outset than trying to be your own lawyer.&nbsp;<\/span><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span data-preserver-spaces=\"true\">Final Thoughts<\/span><\/h2>\n\n\n\n<p><span data-preserver-spaces=\"true\">Real estate is a team sport, and you need an attorney. An attorney is your team manager, and their support and guidance will form the backbone of your business. Starting that relationship early and investing in a lease that will protect you within the boundaries of the law will be the best investment you can make in your property.<\/span><\/p>\n\n\n\n    \n  <div id=\"visibility-group-block_65120990cfaba\" class=\"visibility-group  hidden\">\n        \n\n<div id=\"hero-block_62ee867235a1c\" class=\"first:mt-0 hero-block py-4    has-background has-slate-300-background-color has-text-color has-slate-800-color\">\n    <div\n        class=\"gap-10 lg:gap-20 flex flex-wrap lg:flex-nowrap max-w-screen-xl mx-auto px-4 relative lg:items-center \">\n\n        <div class=\"relative z-30 lg:w-2\/3 \">\n            <main class=\"py-4\">\n                \n\n<p class=\"has-theme-slate-color has-text-color has-large-font-size\" style=\"font-style:normal;font-weight:800\">Find, screen, and manage tenants with fewer headaches<\/p>\n\n\n\n<p class=\"my-3 md:my-5 lg:my-8 has-theme-slate-color has-text-color\" style=\"font-size:16px\">No matter how great you are at finding good rental property deals, you could lose everything if you don&#8217;t manage your properties correctly!&nbsp;<em>The Book on Managing Rental Properties<\/em>&nbsp;takes you on an insider tour of the Turners\u2019 management business, so you can discover exactly how they\u2019ve been able to maximize their profit, minimize their stress, and have a blast doing it!<\/p>\n\n\n\n<div id=button-custom-event-block_641384b1eb1d8 class='button-custom-event'>\n      <a\n    href=\"https:\/\/store.biggerpockets.com\/products\/the-book-on-managing-rental-properties?_pos=1&#038;_sid=7536ae304&#038;_ss=r?utm_source=blog&#038;utm_medium=marketing_block\"\n        x-on:click=\"window.analytics.track('Blog Block | Publishing: Managing Rental Property', {\n      referrer: 'https:\/\/www.biggerpockets.com\/blog\/dont-use-free-lease-templates',\n    });\"\n    class=\" btn-shape inline-block no-underline has-background has-theme-gold-background-color has-text-color has-white-color\" target=\"_blank\">Get Yours Now<\/a>\n  <\/div>\n\n            <\/main>\n        <\/div>\n\n                <div class=\"lg:w-1\/3 first:mt-0 relative h-full lg:flex lg:items-center\">\n            <img decoding=\"async\" class=\"object-cover w-full relative z-20 my-0  rounded-md hidden lg:block\" src=\"https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2023\/04\/IMG_0715-scaled.jpeg\" alt=\"\" title=\"\">\n        <\/div>\n            <\/div>\n<\/div>\n\n  <\/div>\n  \n\n\n    \n  <div id=\"visibility-group-block_64dd31c79f00f\" class=\"visibility-group  \">\n        \n\n<div id=\"hero-block_64dd2875dba9d\" class=\"first:mt-0 hero-block py-4    has-background has-slate-100-background-color has-text-color has-theme-slate-color\">\n    <div\n        class=\" flex flex-wrap lg:flex-nowrap max-w-screen-xl mx-auto px-4 relative lg:items-center \">\n\n        <div class=\"relative z-30 w-full \">\n            <main class=\"py-4\">\n                \n\n<h3 class=\"wp-block-heading my-0 tracking-tight font-extrabold has-theme-slate-dark-color has-text-color has-large-font-size\">Join the community<\/h3>\n\n\n\n<p class=\"my-3 md:my-5 lg:my-8 has-theme-slate-color has-text-color\" style=\"font-size:16px;font-style:normal;font-weight:400\">Ready to succeed in real estate investing? Create a free BiggerPockets account to learn about investment strategies; ask questions and get answers from our community of +2 million members; connect with investor-friendly agents; and so much more. <\/p>\n\n\n\n<div id=button-custom-event-block_64dd2888dba9e class='button-custom-event'>\n      <a\n    href=\"https:\/\/www.biggerpockets.com\/signup\"\n        x-on:click=\"window.analytics.track('Blog Block | Acquisition | Free Membership Signup', {\n      referrer: 'https:\/\/www.biggerpockets.com\/blog\/dont-use-free-lease-templates',\n    });\"\n    class=\" btn-shape inline-block no-underline has-background has-theme-blue-background-color has-text-color has-white-color\" target=\"_blank\">Sign Up<\/a>\n  <\/div>\n\n            <\/main>\n        <\/div>\n\n            <\/div>\n<\/div>\n\n  <\/div>\n  ","protected":false},"excerpt":{"rendered":"<p>A free lease template on a subreddit somewhere sounds like an appealing, low-cost option. But going the cheap route on your lease documents might actually cost you more than getting it right from the start. Here&#8217;s how to do that.<\/p>\n","protected":false},"author":613697,"featured_media":166132,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[5183,7119],"tags":[],"class_list":["post-166128","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-landlording","category-biggerpockets-daily"],"acf":[],"comment_count":0,"_links":{"self":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/posts\/166128","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/users\/613697"}],"replies":[{"embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/comments?post=166128"}],"version-history":[{"count":0,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/posts\/166128\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/media\/166132"}],"wp:attachment":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/media?parent=166128"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/categories?post=166128"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/tags?post=166128"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}