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In this video, Matthew demonstrates how to create a short-term rental agreement using a legal template from legaltemplates.net. He navigates to the real estate forms section and selects the short-term rental agreement. After choosing Texas as the state, he fills out the agreement by specifying the owner and guest details, including any additional guests and their relationships. Matthew emphasizes the importance of stating the maximum occupancy, such as seven overnight guests and five during the day, and mentions setting a charge for additional guests exceeding the maximum, giving an example of five dollars per extra person overnight.