In recent years, property owners have faced a growing conflict between their financial interests, empathy for renters, and what’s best for their businesses. The current rental market’s low profit margins, limited supply of low and mid-priced rentals, high levels of competition, and increasing sales costs make it difficult to find and keep good residents.
But landlords and property owners continue to find ways to increase revenue, build mutually beneficial relationships with renters, and utilize technology to attract and retain tenants.
If you’re one of the many landlords at a loss for where to begin when managing rental tenants, this guide is the perfect place to start.
Rental tenants are individuals who rent a property or living space from a landlord for a specified period, typically monthly or yearly. They are responsible for paying rent and following the terms of their lease agreement.
The ideal rental tenant is responsible, dependable, and respectful of the landlord and the property. They pay rent on time, keep the living space clean and well-maintained, and communicate effectively with their landlord if and when issues arise.
Rental tenants also have rights that landlords should know. These include the right to live in a safe and habitable space, protection against discrimination, and the right to challenge any unfair practices or policies. It is important for both landlords and rental tenants to understand and respect these rights to ensure a positive and mutually beneficial rental experience.
When looking for the perfect tenant to care for your rental property, landlords should consider the process in three parts.:
First, a landlord or property manager should attract the right tenants with great marketing and advertising.
Then, search for their perfectly matched tenant from a pool of applicants using a fair and thorough screening process.
Finally, the landlord can make an informed decision, find the right fit, and start the move-in process.
To entice rental tenants to apply for your property, a landlord must meet tenants where they are: online. The most effective advertising and marketing strategies in 2023 include a strong digital presence.
Here are our favorites that can easily be implemented with basic computer knowledge or the help of a local, professional property manager.
Beyond mastering the art of attracting great tenants, a good landlord will research regularly to stay on top of rental property trends as they ebb and flow.
The rental application process for tenants can be tedious and anxiety-inducing. Looking for stable housing and a reliable landlord puts potential tenants in a vulnerable position.
Taking a few steps can help you stand out in the minds of busy and stressed renters. .
Efficient and effective landlords will walk tenants through the rental application process with a tried and true screening process. Don’t have a consistent tenant screening process set up? Read on.
Investing in a tenant screening process, whether that’s through hands-off software or partnering with a property management company, is critical to landlord success. Screening should be effective and fast but also thorough. Since tenant screening has been a historical hotbed for discrimination—landlords must research their options and consult legal experts whenever in doubt to ensure rental tenants are evaluated fairly and without bias. APM recommends investing in a top-quality tenant screening service so great applicants don’t slip through the cracks.
While the first part of a tenant application process involves asynchronous communication between tenant and landlord, you or your property manager will want to meet with top candidates in person.
Typically, a landlord should ask standard interview questions, including:
The interview can be as formal or informal as you like, so long as you’re able to put together a clear picture of the prospective applicant. If you’re ready to move forward, it’s time to get more detailed with a rental application for tenants. .
Landlords need all relevant information to make the best and most fair decision possible. Before applicants are invited to interview, a landlord will ask for information in the initial application. It’s typical to request to run a credit check and background report on the prospective tenant, as well as ask for expected monthly and annual income (usually verified through paystubs) to corroborate this information. Let’s look more in-depth at how best to collect the necessary information.
As mentioned, property owners and managers should always use a quality screening service or method to screen potential rental tenants. If you don’t have a screening method you’re comfortable with, read on to learn key steps in the process.
First, a property owner should pre-screen tenants in rental applications. This will determine if an applicant meets the basic requirements for tenancy. The Fair Housing Act requires landlords not to screen tenants based on ethnicity, gender, disability, family status, or religion.
However, they can reject a tenant who is not a good fit if they don't comply with pet or smoking policies, have more than the allowed number of vehicles, or intend to occupy the property with more than the legally allowable number of occupants.
To comply with Fair Housing regulations, landlords should write all requirements and give the form to prospective tenants to sign and return.
After making it past the first round, landlords should run a credit and background check on the applicant. When evaluating credit scores, it is important to consider recent foreclosures, large credit card debt, and late payments. Additionally, any criminal records should be investigated. For software that helps you meet all your tenant screening needs, we recommend Buildium’s software, as it’s powered by TransUnion, a trusted credit reporting agency.
Landlords will next look to verify income and employment of prospective rental tenants. Best practice says monthly rent should not exceed one-third of a prospective tenant's gross monthly income.
Regarding employment, landlords often like to see that a prospective tenant has been in their current job for six months or more and has a history of long tenure at previous places of employment.
Before inviting final candidates to interview, landlords or property managers should check all previous addresses, landlords, and evictions to ensure the information included on the application is correct. Finally, the remaining candidates will be invited to interview in person (question options offered above). Afterward, the landlord can decide whether or not to move forward based on all relevant information.
Managing rental applications can be overwhelming, especially if you’re a new property owner. Don’t worry, we’ll cover the important things to remember.
First, landlords should have a thorough understanding of tenant rights. Laws vary depending on the state wherein they own property, so there are some differences according to geographical location. We recommend contacting a legal professional if you’re uncertain about the relevant laws in your area.
After the application is reviewed and accepted, landlords can begin the move-in process for their new tenants. Like rental applications, landlords and property managers should create systems surrounding the next steps to ensure efficiency and a pleasant experience for your new tenants.
What comes next? The official rental agreement for tenants. It’s time to put everything down on paper.
You’ve found the right tenant, and it’s time to get it in writing. Let’s define a rental agreement, why it’s necessary for both tenants and landlords, and what a rental agreement should include.
A rental agreement for tenants is a contract between the property owner and the tenant preparing to move in. The rental agreement outlines the terms and conditions of renting a property.
This agreement typically includes information such as the rental price, payment due dates, length of the rental period, security deposit amount and terms, restrictions on the use of the property, and other clauses governing the expectations and responsibilities of both parties.
The rental agreement serves as a legal document that protects the rights of both the landlord and the tenant in case of any disputes or issues that may arise during the tenancy.
A rental agreement not only protects the rights of the landlord, property owner, property manager, and tenant, but it’s also legally required. Putting rental terms in writing gets everyone—literally—on the same page.
A rental agreement is a legally-binding contract that:
An official rental agreement should—at a minimum—include the following:
If you’re stressing about typing up a rental agreement for tenants, don’t worry. There’s no reason to start from scratch. Quality onboarding templates of all types are just a click away.
As mentioned, rental agreements are in place to protect both landlords and tenants. Property owners and managers should understand what tenants are entitled to and how this translates to day-to-day life.
Since this can also vary depending on the state, property owners should research to understand and abide by their local legislation.
However, all states mandate that tenants have the right to timely repairs and maintenance, fair treatment from the landlord or property management company, a written lease agreement, notice of rent increases or changes, and a habitable living environment.
Find more details about renter’s rights here.
On the flip side, landlords are also protected in various ways, but it might not be exactly how you expect. For instance, landlords are entitled to receive rent payments on time and might be able to take legal action if tenants fail to pay.
Additionally, they have the right to enter the rental property for maintenance or repairs with proper notice given to the tenant. But there are a few things landlords are not allowed to do, like forcibly remove clients, show up unannounced, or change locks without notice.
Handling conflict can be tricky, but a few management must-dos can prevent and de-escalate disputes. Firstly, ensure you build your landlord-tenant relationship on a solid foundation with a clear rental agreement for tenants and consistent, professional communication.
Second, have experts, like a property management company on your side to respond quickly, professionally, and within the confines of the law.
Next, we’ll unpack critical tips to maintain a positive relationship with rental tenants.
Tenant turnover can get expensive. While getting your property ready to rent, advertising the vacancy, showing the property, and screening tenants are some of the most costly and labor-intensive tasks involved in owning and profiting from rental property, that’s not where a landlord’s work stops.
Once you've found ideal tenants, keeping them becomes an essential aspect of your business.
Here’s how to do just that:
A few questions come up again and again for property owners, especially those just beginning their real estate investment journey. We’ve collected a few of the most common questions and answers below to help guide your next steps.
A good tenant pays rent on time, keeps the property clean and well-maintained, and communicates effectively with the landlord or property manager. Additionally, they should respect the terms of the lease agreement and be considerate of their neighbors.
One of the best ways to find tenants quickly is to advertise your property on multiple popular rental listing websites and social media platforms. Offering incentives such as a move-in special or flexible lease term can attract potential tenants. Learn more about finding the best tenants for your property.
Properly screening tenants is one of the many things landlords stress over. But luckily, it’s easier to fairly and adequately screen tenants in 2023 than ever. You’ll want to abide by the terms of the Fair Housing Act, collect information on credit scores and background checks, and verify employment, among a few other crucial steps. Scroll through this guide to understand the essential elements of screening tenants.
Keeping tenants happy can be tricky. It’s also a headache landlords can avoid by partnering with local property managers. Staying in tune with tenants' wants and keeping on top of rental trends are two key ways landlords create happy tenants.
Speaking of property managers, what does that actually mean? Managing a rental property involves overseeing the property's day-to-day operations, such as collecting rent, handling maintenance requests, and screening potential tenants. It also requires ensuring that the property complies with local laws and regulations. Is working with a property manager right for your real estate investment?
As a property owner, your responsibilities may include maintaining the property, ensuring it meets safety standards, paying property taxes, and complying with local laws and regulations. You may also be responsible for finding tenants or managing rental agreements if you rent out the property. However, property owners can pass along many responsibilities to a professional property manager.
Tenants are responsible for paying rent on time, keeping the property clean and in good condition, reporting any necessary repairs or maintenance issues promptly, and following the terms of the lease agreement. Additionally, they are expected to respect neighbors and follow any community rules or regulations.
If—like most landlords—you’re facing struggles such as ineffective marketing, increased vacancy, or a downturn in profits, it may be time to start searching for a property management company to lighten your load. An experienced professional can ensure that you’re doing all you can to attract and retain your property's best tenants.