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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. Matthew chooses Texas as the state for the template. He explains the importance of identifying the owner and guests, including any additional guests and their details. The agreement should specify the maximum number of guests allowed and charge for any extra occupants beyond this limit, providing an example fee structure for over-occupancy. The tutorial emphasizes understanding the terms of the rental agreement for both parties involved.