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In this video, Matthew explains how to create a short-term rental agreement using a legal template. He directs viewers to legaltemplates.net, highlighting the option to access real estate forms. By selecting the "short-term rental agreement," viewers can choose their state, in this case, Texas. He emphasizes the importance of identifying the owner and guest, including any additional guests and their information. Additionally, he notes the necessity of specifying maximum guest occupancy and the fee for exceeding this limit, exemplifying it with a charge of five dollars per additional overnight guest.