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In this video, Matthew explains how to create a short-term rental agreement using a legal template from legaltemplates.net. He starts by navigating to the website and accessing the real estate forms section. He specifically looks for the short-term rental agreement, choosing Texas as the applicable state. Matthew discusses key details to include, such as identifying the owner and guests, noting any additional guests and their information, and setting maximum guest limits. He mentions a charge for each person exceeding the maximum occupancy, demonstrating how to specify these terms in the agreement. A link to the legal template is provided in the video description.