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In this video tutorial, Matthew explains how to create a room rental agreement using legal templates. He directs viewers to click a link for real estate forms and navigate to the tenant section. After selecting the room rental agreement, he randomly picks a state and begins creating the document. Matthew chooses the standard lease option and prompts viewers to input the principal tenant's name and additional details, including the monthly rent amount. The video serves as a step-by-step guide for preparing a room rental agreement efficiently.