6 Essential Tips for Creating a Solid Vacation Rental Agreement

6 Essential Tips for Creating a Solid Vacation Rental Agreement

If you’re starting a vacation rental business, there are several things you need to consider before holidaymakers can stay in your property.

So, today, we’re going to explore a crucial cog in the machine that’s your holiday rental business: a reliable vacation rental agreement.

This document, also known as a short-term rental lease, is the contract between you (the owner) and the renter of the property. 

So, without further ado, let’s look at this in a little more detail.

What’s a Vacation Rental Agreement?

In short, this document describes the length the tenant will use the property. It also highlights the amenities included and the costs of your service.

This helps to ensure you and your guests are on the same page before the customer even steps a foot over the threshold of your property.  

Since this is a legal document, you should always consult an attorney. But, before presenting your first draft to a lawyer, provide them with a list of the things you consider mandatory in this matter. 

But, to help steer you in the right direction, we’ve provided a few pro tips in this article to help you create a reliable vacation rental agreement.

1. Research Local Laws

In many states, you may have to file a license and pay some fees. That’s in addition to paying rental taxes. Needless to say, it’s essential you know the legal processes at play here.

If you don’t have any legal know-how, a decent lawyer is what you need. Laws change considerably from one jurisdiction to another, which is why a good attorney can make all the difference. This is especially true if you own vacation rental properties in different regions.

2. Define Liability

In your contact, you’ll want to define who’s liable as the owner of the property.

Again, you might want to hire the services of the legal professional to help you clarify this area of contention. This especially the case if your business isn’t an  LLC (limited liability company). 


Because owners of LLC businesses enjoy reduced liability as to the property owner. We’re not going to discuss LLC’s in-depth, but we’ll mention a few pros and cons:


  • As its own entity registered, LLC’s have their own bank account and tax benefits
  • LLC’s protect personal assets
  • The regulations surrounding LLC’s aren’t as strict. 


  • They’re dissolved in the unfortunate event of bankruptcy or death
  • There are extra fees required to set up an LLC
  • It acquires some of the responsibilities of being a company

Needless to say, this is something to think about as you establish the extent of your liability. 

3. What’s Inside Your Rental Property?

You need to describe all the things inside of your rental property clearly. Be sure to include all appliances, linens, air conditioners or heating systems, and furniture. Everything needs to be added in this part.

Nothing is too big or too small.

Physically walk around your place and list it all down, so you don’t forget anything.

The guests need to understand each point of the contract, so don’t leave any room for misunderstanding by leaving anything out.

4. Keep it Simple

Use simple language throughout the entirety of the document, especially in areas that talk about responsibilities. If you’re forced to used legalese in individual sections of the agreement, ensure it’s still understandable for everyone.

Keep it short and straightforward. This isn’t a long-term rental agreement. Therefore guests (usually) can’t be bothered to read long contracts. They’re on vacation after all!

5. Tenant Obligations

Be sure to include any ‘house rules’ in the contract that’s specific to your property.

Yes, it’s easy to find a sample contract or have someone else do it for you. But in the end, you have to personalize the agreement to reflect all the rules you want your tenant to follow to keep your property safe.

For instance, it’s essential to add things like a “no pets allowed” rule (if you don’t want animals in your property) Or, a clause against noise after a specific time because it could bother the neighbors.

You get the idea. 

You’ll also want to clarify who’s responsibility it is to clean the property. Is part of it the responsibility of the guests, or not at all? 

It’s also a good idea to get specific about the number of guests that can stay in the rental home at any one time.  

To summarize it, your tenants need to be clear on the responsibilities that come with staying at your property.

Ensure they know what they’re signing up to. That way, it’s way less likely for there to be misunderstandings and confrontation between you and the tenant later down the road. 

4. Make it Clear What’s Included 

By this, we mean, make sure you detail the areas these guests have access to as well as anywhere they’re restricted from entering. This may include parking spaces, swimming pools, communal areas, a gym, etc.

Inside of this section of the agreement, you could also add some other items that are available for guests to use — for instance, kitchenware, cleaning supplies, electronics, Wi-Fi passwords, etc. 

In some cases, you may also offer activities as part of the package. In this case, you’ll also want to include the accessibility to these activities inside of this contract.

If you offer a variety of different rental agreements and vacation packages, it’s wise also to highlight the things their plan doesn’t include. Make it clear they need to pay extra or upgrade their payment tier to access these additional perks. 

Typically, these are things like the use of the air conditioner or heating system, access to a cleaning service, television, or high-speed internet.

The simpler and clearer this part is, the better it will be for your relationship with the guest.

5. Payment Details

This is the part of the agreement where you need to add information regarding payment amounts and the date various payments are due.

This should also include details about your security deposit, the payment methods you accept, and your cancellation terms. To cover yourself in the event of a cancellation, you’ll need to include a detailed rental cancellation policy.

Top Tip: Have these parts of the contract reviewed by your lawyer to ensure you’re using the correct legal language.

Creating a cancellation policy assures a degree of protection for you as the property owner. It’s common to demand a part-payment for their booking to compensate you for the cancellation. So, don’t be afraid of adding such a clause in your contract! 

It’s also common to include other pieces of guest information inside the ‘payment details’ section of the contract. Such as their full name, their phone number, and the day the short-term lease takes effect.

In this part, you can also add the length of their stay, and additional payment dates if the balance isn’t paid in full.

6. Insurance Information

Another thing to keep in mind is that taking out a reliable insurance policy can protect your property from any damages that occur while renting it to guests.

You’ll also want to find insurance that covers you is a guest has an accident or injures themselves during their stay.  

Even when you do your best to screen potential guests, you never know what could happen. So, it’s wise to be prepared for any situation.

As such, if you’ve taken out insurance, be sure to highlight who’s covered for what inside of your vacation rental agreement.

Ready to Write a Solid Vacation Rental Agreement?

Not all properties are the same, which is why personalizing the vacation rental agreement you use for your business is so important. Trust is, it can save you and your business a lot of money and stress in the future.

So, the next time you have to write a vacation rental agreement, follow the tips in this article, and you won’t go too far wrong.

You’re sure to find yourself in a more protected position, and as such, you’ll enjoy the peace of mind that comes with that.  

What’s not to love about that?!

No question is too complicated or too simple for our team to handle! Alternatively, you may find the answers to your questions over on the ‘rental legal agreements‘ thread on our blog. Enjoy!