Landlords or property managers are essential people in the apartment or home rental process. They help you sign and understand the lease, fix and address issues within your apartment, ensure the apartment and complex remain safe and clean and are your go-to person for any problems.
But, it’s important to know the boundaries of what a property manager can and cannot do. Read on for more information about landlord-tenant law and your rights as a renter. Knowing these 10 things a landlord cannot do will help you feel safe in your home.
1. Enter without proper notice
Your landlord is not allowed to enter your apartment without giving proper notice.
In many states, the landlord may not enter without first giving 24-hours notice. The format of notice may vary from place to place. Some apartment contracts state that notice must come in written or electronic form. Double-check your lease before moving in so you can know what to expect.
Once the landlord has permission, the tenant must let them into the apartment. Property managers usually enter to make repairs, to show the apartment to future tenants or to perform a routine check.
The only time the landlord may enter without notice is if there is a true emergency.
2. Force a tenant to leave
While evicting a tenant is legal, doing it without going through proper legal channels is not. This means that the landlord must give the tenant notice before evicting them.
The amount of notice does vary from place to place — ranging anywhere from days to months. If the landlord evicts a tenant without doing it properly, they can face serious consequences.
They also cannot turn off the tenant’s utilities without notice, especially if the apartment is in an area with extreme weather.
3. Raise your rent randomly
Once you sign a lease, it is a legally binding contract. This means that the landlord can not randomly raise the rent without cause.
There are a few instances where the rent can go up —some of these include the addition of a pet or significant remodeling.
The other time rent can go up is if the apartment is within the city’s rent control area. These usually state that landlords can raise the rent only by a certain percentage as specified. This is something you’ll want to check before signing a lease. However, outside of these situations, the rental rate negotiated in your initial lease holds strong.
4. Discriminate against a tenant
Landlords can not discriminate against current or future tenants. According to the Fair Housing Act, landlords cannot discriminate based on nationality, gender, race, disability or family status.
The Fair Housing Act also states that the landlord cannot say that an apartment is not available when it is, can’t harass you and can’t end a lease due to race, gender or family status.
5. Prohibit service animals
If you have a trained service animal according to the Americans with Disabilities Act, a landlord must rent to you even if there is a “no pet” rule.
Service animals, such as seeing-eye dogs, are exempt. You’ll likely have to show paperwork about your service animal, but, you will be able to rent an apartment with one under the law.
6. Allow lead content
Landlords are not allowed to rent apartments that contain lead-based paint or any lead content. This is more common in older homes or apartments but it is still something to consider.
They are responsible for checking the lead content, making repairs and ensuring they do not rent dangerous apartments with lead exposure to people.
7. Use a security deposit for wear and tear
Security deposits are part of almost every leasing contract. They are typically held for the duration of the lease and given back when the lease is over.
The landlord is not allowed to keep the security deposit to recover things such as normal wear-and-tear.
The only time they can keep it is if there are unusual repairs that aren’t normal wear-and-tear or if you break a lease early. They also aren’t allowed to charge a security deposit that is over the state’s limit. This changes from state to state so make sure to double-check what your state limits it at.
8. Refuse to make reasonable repairs
A landlord’s job is to make sure that your apartment is safe and livable. Refusing to make reasonable repairs could end in legal action against them.
Things such as removing mold or lead paint or fixing the utilities are something the landlord must help with. These are repairs that could endanger the tenant.
It is also illegal for landlords to ask tenants to make major repairs such as fixing the balconies or stairs.
9. Use your space
As per your leasing agreement, it is the renter’s right to the space you’re leasing. This means that the landlord cannot withhold space that is legally yours.
Spaces such as parking garages or storage units cannot be used for the landlord’s personal use.
10. Change the locks
Your landlord is not allowed to change your locks without letting you know. If they want to remove you from the apartment, they must go through legal channels to do so. Changing your locks without notice could end in serious legal troubles for the landlord.
What to do if your landlord breaks these rules
If you find yourself with a landlord that breaks any of these laws, you have some options. First, file a claim with the Department of Housing and Urban Development.
Make requests in writing and photograph any damage if your landlord refuses to make repairs. Should your landlord continue to neglect the problems, then you can call your local department of health and report the problems. If your landlord changes the locks without telling you, you can call the police. The landlord does not have the right to refuse you access to your apartment, even if they want to evict you. If you ever file a legal claim against your landlord they are not legally allowed to retaliate against you.
Know your rights
It is so important to know your renters’ rights. There are landlord-tenant laws in place for this very reason. Your landlord can not take advantage of you when renting an apartment. Make sure to do your research on landlord-tenant law and know exactly what a landlord cannot do so you’re not taken advantage of. With this knowledge, you’ll be better served and ready to rent an apartment.
Ashley Singleton is a writer who loves following and writing about current lifestyle, DIY and home improvement trends. You can read some of her other work on the Lady Spike Media website. In her spare time, she performs stand-up comedy in Los Angeles.
A New York man was fined more than $1 million and another has been imprisoned for orchestrating an elaborate fraud they used to acquire $50 million in mortgage loans and build an extensive residential real estate portfolio across Hartford.
Federal prosecutors said the “sheer volume of false documents and material misrepresentations’’ concocted to deceive lenders in the scheme involving cousins Jacob and Aron Deutsch “is staggering.”
Jacob Deutsch, 58, of Brooklyn was sentenced this week to five years in prison and fined $10,000 in U.S. District Court. Aron Deutsch, 63, of Monsey was fined $1 million and put on probation for five years.
Under their guilty pleas to federal fraud charges, the two men admitted to a scheme in which they acquired 17 multi-family housing complexes across the city between 2016 and 2021 by creating hundreds of phony financial documents to obtain 24 separate mortgages.
Among other things, Jacob Deutsch admitted creating an elaborate ruse that convinced lenders that a empty, 24-unit apartment complex the cousins succeeded in buying at 16 Evergreen Ave. was not only fully occupied, but was occupied by tenants paying inflated rents. The properties ran from Washington Street south of downtown, through the West End and onto Asylum Hill.
“All told, he fraudulently induced numerous victim financial institutions to finance the purchase of assets from which he is now profiting, fraudulently procuring 24 mortgage loans totaling nearly $50 million dollars, and shifting the risk of catastrophic loss onto the victim financial institutions and the secondary markets on which they rely,” the U.S. Attorney’s office said of Jacob Deutsch in a court filing.
Because of the stability of the Hartford retail market over the period of the conspiracy, prosecutors said lenders — four banks and secondary mortgage market players like Fannie Mae — suffered no significant losses.
After realizing they would be prosecuted, the cousins, who operated B H Property Management on Wethersfield Avenue, claimed they were able to sell off the properties at break-even prices, meaning there was no loss to lenders. Federal prosecutors claimed the lenders lost about $3.5 million on $50 million in loans.
The mortgage fraud conspiracy unraveled when federal housing authorities decided that the mortgage application and due diligence materials associated with the 16 Evergreen Ave. purchase were “wildly false,” prosecutors said.
Among other things, the loan application for 16 Evergreen to the lender CBRE Capital Markets contained a rent roll showing gross yearly rental income of $280,000 when, in reality, the complex was empty.
To support the phony application, prosecutors said Jacob Deutsch admitted creating an elaborate — but phony — list of tenants, accompanied with their forged signatures on phony leases and fake moving in dates. He then hired a company to “stage” empty apartments with furniture, clothing and other furnishings before making them available for inspection by the lender.
When the Federal Home Loan Mortgage Corporation, to which CBRE planned to sell the loan, wanted additional proof of occupancy, prosecutors said Jacob Deutsch arranged for an employee to collect dozens of electric utility bills, doctor them to correspond with names on the fake rent roll and send them to CBRE. He was accused of doing the same thing with natural gas bills.
Jacob Deutsch next fabricated a banking record that purported to show deposits to his company’s Evergreen Avenue rent account, complete with copies of money orders, cashier’s checks and stamped envelopes. Prosecutors said Aron Deutsch purchased the cashier’s checks.
Later, the cousins decided to refinance 16 Evergreen Ave. with a new lender and reconciled the new loan application with the phony records associated with the first one.
Similar kinds of frauds were associated with loans for other properties around the city.
Prosecutors said Jacob Deutsch falsely inflated the occupancy rate of another of the partnership’s buildings, at 12 Willard Street, by listing employees as tenants — without their knowledge.
The partnership also lied to lenders about improvements to properties. It created invoices showing $526,000 in improvement at 1650-1680 Broad St., when actual work involved only the installation of a $38,000 boiler system, prosecutors said.
Prosecutors said the cousins used the fraudulent loan proceeds to acquire new buildings and make improvements to those previously acquired.
In our latest real estate tech entrepreneur interview, we’re speaking with Daniel Shaked from Home365.
Without further ado…
Who are you and what do you do?
I am the CEO and Founder of Home365. We are a new breed of property management companies which leverages quite a bit of technology and artificial intelligence to make the entire process of owning real estate much more profitable, predictable and hassle free. First, we conveniently bundle a multitude of services for a one-rate fee, including management fees, repairs, maintenance, tenant placement and rent loss due to vacancies. To generate this fee, we look at the various data points of the home including the age, location, renovations, appliances, etc. But we also use this data and a series of sensors throughout the home to monitor systems so that we can predict any major issues and be proactive with maintenance. This saves landlords up to 50-percent in maintenances costs traditionally paid.
What problem does your product/service solve?
What we are really doing is offering refined communication between all the parties involved and improving customer service. Tenants, landlords and service providers communicate through Home365’s own app, which uses intuitive technology to report maintenance issues schedule repair visits and track the process from beginning to end. Tenants also have the ability to send video of the problem directly to the service provider. After scheduling an appointment, the tenants can track the movement of the maintenance worker through a map feature to save time and frustration. All fees are covered by Home365 without any additional cost to the property owner.
What are you most excited about right now?
I am most excited about our recent launch into the Las Vegas market which has a large number of property owners. We acquired Pangea Realty & Property Management, a Las Vegas company that currently owns over 300 single-family homes in Southern Nevada to begin our service.
What’s next for you?
My next step is to acquire more properties to use our service. My company is actively looking at deals in Florida, Texas and California.
What’s a cause you’re passionate about and why?
I’m really big on working with young entrepreneurs to get their ideas and businesses off the ground. I think it’s important to support the next generation pursuing new ideas. Most new businesses don’t make it, so it’s important for me to help them keep moving forward until they find the one that does. The momentum we have right now to help those ideas move to next steps is incredible.
Thanks to Daniel for sharing his story. If you’d like to connect, find him on LinkedIn here.
We’re constantly looking for great real estate tech entrepreneurs to feature. If that’s you, please read this post — then drop me a line (drew @ geekestatelabs dot com).
Landlords across the country have been empowered to act as a kind of police force in the name of crime prevention for decades. How? Through local “nuisance property” laws and “crime-free housing” programs that require them to evict tenants for vaguely defined “criminal activities.”
As of Monday, California became the first state in the nation to ban so-called crime-free housing programs. More states should follow suit.
Such laws target low-income and minority renters for eviction and violate their civil rights. That’s bad enough. But they also fail to reduce crime.
Advertisement
Cities across the country have been implementing these policies for about 30 years, building on the Anti-Drug Abuse Act of 1988, which stepped up evictions in federally subsidized housing. By 2019, about 2,000 American cities had a crime-free housing program, and 37 of the 40 largest U.S. cities had a nuisance property ordinance.
Even as these policies spread, their efficacy was in doubt. I led a recent analysis of California’s crime-free housing policies that found they had no effect on crime. Other researchers have found that by driving people into desperation and homelessness, nuisance property ordinances may actually increase property crime.
Crime-free housing policies backfire partly because they treat 911 calls as an indicator of criminal activity. This creates a perverse incentive: For fear of being evicted, tenants don’t call authorities when they need them.
This particularly harms victims of domestic violence, who may hesitate to seek help from police lest they lose their housing. These policies can also dissuade tenants from seeking medical aid during drug overdoses or mental health crises. Evictions also hamper crime prevention by disrupting community social networks, making it harder for residents to monitor what’s going on in their neighborhoods — a critical element of crime prevention.
Advertisement
My study of California found that city blocks with apartments certified as crime-free saw 21% more evictions than blocks without such housing. Other researchers have found that nuisance property ordinances increase eviction filing rates by 16%. In the six months after the U.S. Department of Housing and Urban Development instituted a “One Strike and You’re Out” policy on criminal activity in 1996, reported evictions from public housing surged 40%.
Evictions are deeply harmful in many ways. People who are evicted struggle to find housing again, and tenants removed from public housing are prohibited from receiving housing assistance. That can lead to more homelessness and desperation. Evictions also cause disproportionate housing insecurity for children, more unemployment, additional use of emergency room resources, and accidental drug and alcohol deaths.
Legal experts have argued persuasively that punishing people with eviction instead of through criminal justice procedures also denies them due process. These policies don’t require an arrest or conviction or even an indication of crime anywhere near the property. They don’t even require a crime.
People have been evicted under crime-free housing policies over kids playing basketball or jumping on a trampoline and because of complaints about barbecues. Tenants can even face severe consequences for the behavior of their guests. One federal court case concerns an Illinois city trying to evict a family because of a burglary committed by a friend of their teenage son who had slept on their couch.
The policies tend to be selectively enforced, with low-income, multifamily properties bearing the brunt. This has led the Department of Justice to take action against cities for violations of the Fair Housing Act and other federal laws. In 2022, the San Bernardino County city of Hesperia signed a consent decree with the federal government related to selective application of its crime-free housing program. Lawsuits have been filed on similar grounds against cities in Washington, Illinois, Pennsylvania and Minnesota.
What is the point of these harmful policies if they aren’t reducing crime? Public officials have suggested their real goal is segregation.
A Hesperia official acknowledged that the purpose of the city’s crime-free housing program was to remove what he described as “those kind of people” and “improve our demographic.” The mayor of Bedford, Ohio, said the city’s nuisance property ordinance was about taking “pride in middle-class values” and curtailing “urban immigration.” The analysis I led found that cities with crime-free housing programs had larger Black populations and that the affected apartments were on lower-income blocks with larger Black and Latino populations.
HUD has issued guidance to cities on how these policies may violate the Fair Housing Act by disproportionately evicting women, victims of crime and people with disabilities. But more needs to be done.
Following California’s lead, other states should limit evictions under these policies without an arrest or conviction or based on the behavior of nonresidents. Cities should also be required to report the number of evictions resulting from crime-free housing policies and nuisance ordinances. Similar federal policies also need reconsideration, including the one-strike policy for public housing and the rules that prevent evicted tenants from obtaining future housing assistance.
These policies and the evictions they cause are at best an ineffective means of preventing crime. At worst, they’re a harmful form of discrimination that leads to more crime and homelessness. Ending them could make all our communities safer.
Max Griswold is a policy researcher at the Rand Corp.
I bought my first rental property in 2010 and I admit it was much easier to buy rentals that cash flowed back. At least it was easier in my area in Northern Colorado. A lot of people wish they could go back in time to buy investment properties (me included) but no one has invented a time machine yet. Wishing for the impossible will do you no good. Since we have to live in reality can you still make money in today’s market with rental properties?
Why is it harder to buy rental properties in 2024?
It is harder to invest in real estate in 2024 due to multiple factors.
Interest rates are much higher than they have been for decades. High-interest rates are making it tougher on everyone in real estate. The high rates make it harder to cash flow no matter what prices are. They also make it harder to refinance properties which can be a big part of investing in rentals.
Housing prices are higher than they have ever been. Now, in most markets housing prices will always be higher than they ever have been, that is how the economy and inflation works. However, prices are still high and that makes it tough to buy rentals that make money.
There is record low inventory in most areas of the country. When there are fewer homes for sale it makes it harder to find deals which is what most real estate investors are looking for.
Many areas of the country are enacting tenant-friendly laws that make it harder on landlords. Rent control, free attorneys for tenants, no-cause evictions are all making it harder on landlords.
There is a growing ideology claiming landlords are evil and hurting society because they raise prices and take housing away from owner-occupants.
It is important to know that even though these things make it harder for real estate investors trying to buy now, rising prices have made many existing real estate investors very rich. Landlords also help the housing market, they do not hurt it.
How do you make money with rentals in today’s market?
I hope I did not scare everyone off with the doom and gloom of the last section of this article. However, there are still ways to make money with real estate in today’s market. How do you make money with rentals?
High interst rates make it tougher to make money but they are coming down and they should continue to decrease over the next couple of years. Real estate investors have made money with higher rates for decades even if it is harder to do so.
Housing prices are higher but there are still good deals out there. There will always be good deals no matter how high prices are. The key to investing in real estate is getting a good deal whether you or flipping or buying rentals. Good deals can make up for all of the other issues.
While there are few houses for sale right now there are still houses and multifamilyl and commercial real estate for sale. Real estate investors also do not need to buy only properties that are for sale. There are also off-market deals that can be just as good or better than on-market deals.
There are a lot of areas that are enacting more laws against landlords. However, there are still many areas that are landlord-friendly and I made list of the best states for landlords here.
It may be tougher to invest in real estate now than ten years ago but it is still definitely possible to make money with rental properties.
What strategies can you use today to make money in real estate?
It might not work to buy a single-family house in Denver or Seattle or Miami as a rental anymore if you want it to cash flow. While it might not work in every city there are still many areas where you can make money with single-family homes. There are also different strategies you can use to make money with real estate.
Invest in different markets. Not every market will work for every real estate strategy. It is really hard to start out as an investor in an expensive market. There are many markets with affordable real estate and while it is not easy investing in a different market could be the route to take.
Being a landlord may not be the right move for you right now. It is possible to flip houses and make money in some markets when you can’t make money with rentals in those markets.
Switching to a different type of rental may help as well. I switched from single-family rentals to commerical real estate in 2016. I also added in some multifamily properties as well. They often cash flow better than single-family rentals in expensive markets.
If you cannot afford to invest in your market, finding a partner may be another way to make real estate work in your area. Many people love to have their money in real estate but do not have the time to find the right investments.
While it is not easy to invest in real estate right now, it is rarely easy. Even when I bought my first rental properties many people (including those in the industry and in my family) told me I was an idiot. They told me the market would keep crashing and real estate would never come back. It was also tougher to get loans back then and there were not nearly as many educational sources about real estate either. I learned most of my strategies from reading books, some that were decades old that I hoped would still hold true when I was investing.
Conclusion
There is no perfect time to invest. The only way to know when the timing is perfect is years or decades after that time occurred. Waiting rarely works out but luckily there are many ways to invest in real estate even if rentals won’t work for you in your market right now. If you want to learn more about investing in other markets I put together a very detailed webinar on the subject you can watch below.
In our latest real estate tech entrepreneur interview, we’re speaking with Frank Barletta from UpTop.
Without further ado…
Who are you and what do you do?
I am the CEO and Co-Founder of UpTop, the first free end-to-end rental platform. We combine a rental listing search tool and a full property management software to streamline the way renters and landlords, owners and property managers work together for the entirety of the renting lifecycle.
I started UpTop after moving ten times in eight years and thought that there had to be a better way to fix the issues through the use of technology. My primary day-to-day responsibilities include leading sales, operations, and most importantly empowering my team to be successful and reach their goals.
Before starting UpTop, I gained extensive experience in the technology space, working for several firms heading their technology operations within the consulting, finance, media, and e-commerce spaces.
What problem does your product/service solve?
The rental process is broken. Prospective tenants have to search through websites, get trapped by fake listings, sending social security numbers over email, and deliver personal documents to landlords and owners. Today I can book a flight and rent a car on my phone, why can I not complete these tasks for renting?
After talking with property owners and managers, it was clear that software for the rental industry is expensive and requires system integrations, leading to operational issues and increased costs. Therefore, we created a one-stop shop where owners and managers can lease and operate their businesses efficiently from listing syndication to accounting reporting and everything in between. We do not charge owners or property managers to use the platform, which has enabled us to provide rental tech tools to owners and property managers of all sizes.
What are you most excited about right now?
I am most excited about the innovation that our team is producing and how we will be able to enhance the industry through technology by delivering actionable insights.
What’s next for you?
The next step for me would be to continue to help UpTop continuously grow and support my hardworking team in our expansion.
What’s a cause you’re passionate about and why?
I love the ocean. The work we do at UpTop is sustainable for the environment because of all the paper we are saving; however, there is more work to be done to save the ocean. Every day more and more beaches are being littered with plastic, and there is so much more we can do to help.
Thanks to Frank for sharing his story. If you’d like to connect, find him on LinkedIn here.
We’re constantly looking for great real estate tech entrepreneurs to feature. If that’s you, please read this post — then drop me a line (drew @ geekestatelabs dot com).
Investing in real estate is some of the oldest and most reliable financial advice in the books. Few other assets can compete with real estate’s vast array of benefits. These benefits include tax advantages, appreciation, relative impunity to market shifts, and even the potential for passive income.
But even if you have every intention of investing in real estate, it can be challenging to get started. After all, even a modest home usually requires a substantial down payment. And it can take years to save up those five-figure sums. The term “real estate investor” may bring to mind a multi-millionaire who manages several properties, leaving you feeling overwhelmed enough to give up the ghost entirely.
Fortunately, it is possible to invest in real estate with little or no money, even if you aren’t swimming in discretionary income. For instance, with an Opportunity Fund or REIT (Real Estate Investment Trust) you can get your foot in the door even if you can’t afford to purchase an entire property. There are also a host of ways to leverage your own home. These include house hacking, renting vacation space on Airbnb, and more.
In this post, we’ll break down everything you need to know about how to invest in real estate. We’ll go over some of the most common types of real estate investing. We’ll also break down how they can help you make money. And we’ll explain how you can begin, no matter how much capital you have in hand.
Why Invest in Real Estate?
Before we dig into the meat of the post, let’s take a moment to backtrack. Why is real estate investing such a well-worn piece of financial advice?
You’ve probably heard that diversifying your portfolio of real estate investments is essential. But your “portfolio” doesn’t just have to live on the stock market! Real estate investing gives you, as the name suggests, a real, tangible asset. And it’s much less vulnerable to the capriciousness of the market.
Real estate investing can help you not only build home equity but also generate passive cash flow. Both through the process of appreciation and the more intentional, hands-on approaches we’ll study further below. And owning your own home can help you reap financial benefits while simultaneously providing for one of your most basic needs.
How to Invest in Real Estate with Little Money
When a down payment might cost as much as $60,000, it’s understandable that many first-time property shoppers feel overwhelmed. They say you have to spend money to make money. Yes, but that’s quite a hefty figure for the average American earner.
To be sure, some real estate investment strategies require a good deal of cash upfront to be workable. But there are other tactics that don’t necessitate such a large lump sum to begin with. This means you don’t have to be a real estate mogul to be a property owner. We’ll break down various strategies at both ends of the spectrum below.
Types of Real Estate Investing
Let’s get into the nitty-gritty. What types of real estate can you invest in?
There are three main types of investment properties available to real estate investors.
Residential properties are probably the ones you’re most familiar with. They are exactly what they sound like: buildings used by individuals and families as residential living spaces. These properties include single-family homes, duplexes, apartments, condominiums, and townhouses, and multi-family homes (so long as they’re being used residentially and don’t exceed four units).
Commercial real estate are properties used to conduct business. They may include offices, storefronts, retail spaces, farmland, and large multi-family houses or apartment buildings.
Industrial real estate are properties that serve industrial business purposes, such as factories, power plants, or storage and shipping warehouses.
Furthermore, there are both active and passive forms of real estate investing.
Active investing is, well, active. It requires a good deal of time, energy, and commitment from the investor. Active investing may become a part- or even full-time job for the investor. They usually share ownership with few (or no) other people and thus bears a lot of responsibility for the success of the investment.
Passive investing, on the other hand, allows the investor to reap the benefits of investing without taking on the pressure and responsibility of full ownership of a tangible property. In most cases, passive investing involves supplying capital to a larger investment pool. You earn capital gains on loan interest through dividends paid to shareholders.
We’ll go into it all of this in more detail, including specific ways you can invest in real estate, both active and passive.
How Real Estate Investing Can Help You Earn
Before we break down the specific ways you can get started investing in real estate, let’s talk about how it can help you make money. (After all, that’s the whole point!)
You can invest in real estate in several ways, depending on what type of investing you’re participating in.
Equity and appreciation
Purchasing real estate equips the owner with a “hard asset”; the tangible property or building. Owning this kind of asset confers equity, or value. It isn’t as vulnerable to the fluctuations of the market as stocks, bonds, and other securities. Furthermore, property has a longstanding history of increasing in value over time, or appreciating.
On the contrary, other types of purchases (like automobiles) depreciate, or lose value. Thus, purchasing a property may allow you to earn income passively simply through the process of appreciation. It more or less ensures that the cash value of your home is a safe and stable part of your overall net worth.
Rental income
Chances are, you’ve had to pay rent to a landlord at some point in your life. Well, if you become the landlord, someone’s paying you the rent. And as long as that rental price eclipses your total expenses, including your mortgage and maintenance costs, the rest is profit!
Aside from managing the investment property, you can also collect rental income by sharing your space on platforms like Airbnb or house hacking, which we’ll explain below.
Sale profit
This happens when you buy a home with the intention to fix it up and sell it down the line (also known as “house flipping”.) It’s the difference between your sale cost and your purchase cost (minus all the expenses put into maintenance and improvements) is pure profit.
Loan interest
The interest charged on home and property loans can increase the value of real estate investments made through REITs, investment platforms, and private equity firms.
Ways to Invest in Real Estate
Now we know a bit about the different types of properties available to investors and how those real estate investments stand to help you earn cash.
So, what are the specific ways to go about real estate investing? There are several in both the “active” and “passive” categories.
Active:
House flipping, or rehabbing, is when an investor purchases a property with the sole intent of fixing it up to sell it later on.
Wholesaling is similar to flipping houses, but less work intensive. Wholesaling occurs when an investor purchases a property they believe is underpriced, so they can quickly sell it to another investor at a profit.
Rental properties give investors a long-term way to draw profit from their investments, though they do require lots of hands-on management and maintenance over time.
Airbnb, Vrbo, and other vacation rentals can often be listed for substantial per-night prices. They can be especially lucrative in high-demand travel destinations.
Passive:
Private equity funds pool the assets of many investors, which creates a larger, more powerful investment fund. These funds are usually overseen and allocated by a dedicated manager. They may have high minimum investment thresholds and requirements to join.
Opportunity funds also pool investors’ assets, but with the specific purpose of making investments in qualified Opportunity Zones. These are low-income, up-and-coming communities that would benefit from private investments and economic development.
REITs are companies that invest in commercial properties. Private investors can purchase shares of the company and earn income on capital gains in the form of dividends.
Online REIT platforms can make real estate investing accessible to beginning investors, often carrying no net worth or accreditation restrictions. They may allow you to invest in specific properties or in pre-built, diversified portfolios of real estate.
We’re going to break down these different investment options in even more detail below. But first, let’s start a bit closer to home—literally.
Starting with Your Own Home
One of the most straightforward ways to invest in real estate is probably already on your financial to-do list, anyway: purchasing your own home.
Purchasing a home of your own allows you to kill two birds with one stone. You’re taking care of the basic need of shelter, while also leveraging the purchase to reap a host of financial benefits.
Here are just a few ways that owning a home can help you save and earn money.
Build equity: As discussed above, property ownership confers relatively immutable equity to the purchaser—that is, your home is a fairly safe, tangible asset to add to your overall investment portfolio.
Receive tax benefits: Certain homeowners’ expenses, including real estate taxes and home mortgage interest, are tax-deductible. And if you sell your home, you may exclude up to $250,000 of capital gains (or $500,000 if filing jointly) from your taxes.
Take advantage of appreciation: Even accounting for the 2008 crisis, the cost of homes and other properties have steadily increased over time for the past 50 years. So, the home you purchase today will likely be worth more than the price you paid for it in the future.
Stop paying rent: Although you’ll likely still have a mortgage payment and other expenses to cover as a homeowner, you won’t be paying rent to live in another person’s property. It’s a cost that is essentially entirely wasted, since you aren’t building home equity in the rental property.
Keep the value of your home improvements: When you own a home of your own, any improvements you make will add to the property’s total value, beefing up your asset as well as beautifying your living space.
House Hacking
Another way to make money by purchasing your own home is known as “house hacking“. It’s a real estate investment strategy wherein you leverage rental income from your primary residence to live there cost-free.
The term was originally coined by entrepreneur and author Brandon Turner, who wrote “The Book on Investing in Real Estate with No (and Low) Money Down” and “The Book on Rental Property Investing.”
House hacking may be done, for example, by purchasing a duplex. The investor rents out one unit at a price that covers the mortgage cost while living in the second unit. Some homeowners have also used space-share platforms like Airbnb to offset their housing costs in the same manner.
Real estate investors can use this strategy to pay off the property and even create a profit margin. This will eventually allow them to invest in more rental properties. Thus, house hacking is a great way to combine the personal financial benefits of homeownership with the long-term earning potential of other types of property investment.
Buying a Home Without a Huge Down Payment
Given the recent trends in the housing market, you may feel daunted by the prospect of becoming a homeowner. In 2023, the U.S. housing market experienced significant challenges, with home prices rising to near-record highs.
But there are many incentives and programs designed to make this large investment more feasible for first-time home buyers.
FHA (Federal Housing Administration) Loans may allow borrowers to purchase a home with a down payment as small as 3.5% of the purchase price and with credit scores as low as 580. (You may also be approved for an FHA loan with a lower credit score, but your minimum down payment may be higher.)
The USDA also offers low-cost loans to low- and moderate-income households purchasing homes in qualified rural areas.
Down Payment Assistance Programs offered by local governments and private firms can provide grants, loans, and educational materials to prospective home buyers
Many other financial institutions and organizations also have special incentives for those purchasing their first homes or low-income families in the housing market. Make sure you check with your local housing authority to learn more about what’s available in your area.
Active Investment Opportunities
Want to get hands-on? Here are the details on some of the most popular and accessible active real estate investment opportunities.
House Flipping
If you’ve ever watched more than thirty minutes of HGTV, chances are you’re at least passingly familiar with the idea of flipping houses. It’s basically where you purchase a home with the express intent of fixing it up and selling it (at a higher cost) later.
House flipping is a great way for investors to earn a significant profit. However, they do need to know how to complete the flip successfully without incurring too many costs. Expenses can quickly eat into the investment’s return.
Finding a Home to Flip
House flippers have to be able to recognize a home that may be slightly undervalued but would be able to sell well given the proper upgrades. This involves both an understanding of the area’s desirability and the types of improvements that generate increased home value.
House flippers are responsible for the entire cost of the home purchase. They must also pay for all the upgrades, which they may either do themselves or hire out to professionals.
Either way, flipping houses incurs a hefty up-front cost, and it does come at a risk. Even after you make all the improvements, it’s possible that the house will languish on the market.
This can mean racking up maintenance, taxes, and other expenses for the real estate investor. However, a properly executed, short-term flip can create a substantial profit margin in a relatively small period of time.
Wholesaling
Like house flippers, wholesalers purchase homes with the intent of selling them quickly. But, they aren’t planning to do any heavy lifting along the way.
Instead, wholesalers find properties that are undervalued for their market. They scoop them up and resell them to other investors at a price closer to their true value. Thus, earning the difference as a profit.
Rental Properties
While managing rental properties may seem like a straightforward and reliable way to earn income, it’s one of the most work-intensive approaches on this list. It does require enough up-front capital to purchase the property (or properties) in the first place. However, landlords do stand to see substantial and steady returns in exchange for the work and effort they put into their properties.
After purchasing a viable property, which needs to be well-maintained, in a desirable location, and well-advertised, landlords are responsible for filling that property with qualified tenants. This can involve a time-consuming and labor-intensive screening process.
After all, as a landlord, you’re giving your renters the keys to your investment—literally! It can be a very risky move if you don’t take the time to ensure your tenants are well-qualified.
Finding & Qualifying Tenants
Along with running a standard background check, landlords may also conduct interviews with and request credit reports from prospective renters, all of which takes time. And don’t forget: every month your rental property is unfilled is a waste of potential income.
Once you do find qualified tenants, you’ll be responsible for a host of obligations unless you hire a property management company. You’ll need to provide maintenance and repairs. You’ll also need to stay on top of rent collection and record-keeping. It can quickly become unwieldy once you have several properties.
You’ll also need to be sure you’re in compliance with all the renters’ rights that exist in your jurisdiction, including laws that regulate the eviction process. Of course, you’ll need to put in the work to find good renters and a well-maintained property in the first place. When done so, managing rentals can provide a smooth and steady source of income for relatively little active work.
Seller Financing
Want to buy an investment property with no money down? Look into seller financing or a land contract. This is where the seller acts as the bank. You make your mortgage payments, including interest, to the seller.
After a few years or so, you will have enough equity in the home to get a bank loan. You can then make a lump sum payment to the seller.
Private & Hard Money Lenders
Private money lenders generally charge between 6% to 12% on the money borrowed. Hard money lenders usually charge 10% to 18%. Hard money loans are not from banks. They are from individuals or businesses aimed at financing real estate investments for a return on their money.
Hard money loans are used by investors who don’t qualify for conventional financing. They are typically used to fund renovations. Once the house is finished or has some equity in it, the borrower then refinances to a conventional mortgage with a lower interest rate.
Airbnb, Vacation Rentals, and Space Sharing
Managing a traditional property, wherein renters sign a multi-month lease, is not the only way to make money from an investment property. Platforms like Airbnb have revolutionized the real estate market. They allow homeowners (and sometimes even renters) to make money by renting out their space on a temporary, per-night basis as a vacation rental.
What’s more, you don’t necessarily have to rent out an entire home or unit to participate. A private room, or even a couch in a shared living room, is acceptable for some travelers using these services.
Airbnb and other vacation rental platforms make it simple for a novice renter. You don’t need to have a huge amount of know-how to start earning money this way. In fact, you don’t even necessarily have to “invest” in any property at all. Some landlords may allow their renters to list their housing on Airbnb as a sublet.
Airbnb Laws
However, as this new form of investment property has expanded, it’s created housing crunches in some cities. It’s resulting in “Airbnb laws,” or short-term rental legislation. These laws may limit your ability to use your housing in this way.
Always check your local regulations before you list your space on Airbnb or another of these types of platforms. If you don’t own the space, ensure that short-term sublets are allowed. Check your lease or ask your landlord directly.
Real Estate Investing Groups and Passive Investing
You may have noticed that many of the active real estate investment opportunities listed above do require substantial upfront capital to get started. You can’t wholesale or flip a house if you can’t purchase the house in the first place!
Furthermore, these active strategies generally involve a high level of skill, effort, and responsibility. It may not be feasible for those committed to other full-time careers.
Fortunately, there are still other ways to get involved with real estate investing, even if you don’t want to own or manage tangible property. (Or if doing so is out of financial reach for you right now). These passive investment tactics can help you glean the benefits of real estate investing without taking on quite as much of a fiscal and physical burden.
Private Equity Funds
A private equity, or PE fund, pools contributions from various investors to make larger investments. They’re often limited liability partnerships. That means there are fixed periods during which investors do not have access to their holdings.
Instead, PE funds allow investors to earn gains on debt and equity assets passively, without putting in much active work or research. Asset allocation and investments are managed by a dedicated individual or group. They earn money through annual fees as well as profit sharing.
PE funds come in various types, including the following:
Core equity funds generally invest in established commercial properties. They don’t carry risks like needing major improvements or experiencing losses for lack of consumer demand. The core strategy is simultaneously the least risky among PE funds and, typically, the least gainful.
Core plus equity funds generally follow the core strategy, but take a few more risks on properties that may require minor upgrades. This leads to a higher risk-return ratio on average.
Value added equity funds may invest in commercial properties that require substantial upgrades or new management to operate at their full potential. They may also seek to sell the property after improvements are made to create an additional profit margin.
Opportunistic equity funds offer the highest potential rewards, along with the highest risk. Investment properties purchased via these funds may need new construction or even land acquisitions. The payoff of such a new business venture is all but guaranteed. Furthermore, these developments take time, which means your investment capital may be tied up for longer. However, when they pay off, opportunistic equity funds see some of the best returns of the bunch.
Although PE funds are powerful real estate investment engines, they do often have high minimum investment requirements, generally not less than $100,000. Some funds may also be limited to accredited or institutional investors who can demonstrate available means.
Opportunity Funds
Opportunity funds operate on a similar model to private equity funds but are specifically used to make investments in qualified Opportunity Zones. These are economically distressed areas designated by the state and certified by the Secretary of the U.S. Treasury. Opportunity funds are legally required to invest 90% of their assets into properties in these Opportunity Zones.
Because these areas tend to be up-and-coming (and because tax benefits can incentivize investors to support them), opportunity funds often see substantial capital gains for their investors. And taxes incurred on those gains can be deferred until December 26, 2026.
That means the longer the investment is held before that date, the lower your overall tax liability will be. And opportunity fund investments held for at least ten years prior can expect their capital returns to be permanently excluded from capital gains taxes.
Of course, this strategy requires parting with your investment capital for a significant period of time. It’s best for those who can afford to put down the money to play the long game. If you can, however, investing in one is a great way to see substantial returns for almost zero effort.
Real Estate Investment Trusts (REITs)
A real estate investment trust(REIT) is a company that invests in commercial properties. As an investor, you purchase shares of this company just as you would any other. You earn income through its debt and equity assets in the form of shareholder dividends.
REITs operate similarly to mutual funds. They provide an excellent way for the average earner to experience the benefits of real estate investing. You don’t have to have a huge amount of capital to get started, as minimum investment requirements may be quite low.
However, they may carry high investment fees, especially in the case of private REITs (i.e., those not publicly traded on the stock market). Fees at these companies may run as high as 15%. REITs may also be illiquid and keep your money locked up for longer periods of time.
Online Real Estate Investment Platforms
In this digital, all-sharing-all-the-time age, most of us have already heard of crowdfunding. Real estate investments are no exception to the rules of the new millennium.
Online real estate investment platforms have begun springing up. They can make real estate gains achievable for average investors who may not have the towering net worth or accreditation status necessary to buy into more formal funds. Depending on the specific company, you might be able to choose specific investment properties to fund or buy into a diversified portfolio of investments.
Fees and minimum investment requirements are relatively low on real estate crowdfunding platforms. For instance, Fundrise lets you get started with just $500. That is much less than you’d have to pay to get in on most types of active investments! Check out our full review of Fundrise here.
Ready to Get Started Investing in Real Estate?
As you can see, there are several ways to start investing without saving up a five- or six-figure sum. And if you do it right, your investments can actually help you reach those high savings goals. You can then fund other types of investment projects!
However, as with any financial objective, planning and strategizing is key. Saving up as much capital as possible will help you get the best return on your investment once you’re ready.
You can’t allocate your assets without first keeping track of them, and to achieve that, you need to create a budget. If you’re in debt, aggressively paying it off will free you of a weighty financial anchor, so check out these powerful debt relief options.
Finally, if you intend to purchase property either to live in or as an investment opportunity, your credit score matters. It’s as simple as that. If your credit score isn’t quite where you want it to be, take these steps to raise it. Doing so will allow you to get the best interest rate once you’re ready to make the big purchase.
Rent is a universal expense — almost everyone pays either rent or a mortgage. In fact, rent usually takes up about 30 percent of your salary but in some cases, it is even more. If you’ve found yourself facing hard times financially and are struggling to make ends meet, you may want to create a rent reduction letter to give to your landlord.
It may seem nerve-wracking to ask your landlord to reduce the cost of your rent. After all, you signed a lease and agreed to the price. However, you’ll never know if you don’t ask.
We’ve created a thorough guide that’ll walk you through reasons to ask for a rent reduction, how and when to ask your landlord and what to do if you’re denied. If you’ve found yourself in this situation, we’ve got you covered with detailed information.
7 scenarios to ask for a rent reduction
Everyone’s financial history is different. Some people are struggling to pay rent because of a low-paying job while others have had an unexpected emergency pop up that negatively impacted their budget.
Here are some examples of different reasons you could write a rent reduction letter to your landlord.
1. Financial trouble
If you’ve found yourself in a situation where money is suddenly tight, this could qualify for a rent reduction. Life happens and it’s common for unexpected bills to pop up. Perhaps you were in an accident and now have medical bills to pay for or your car broke down and needs repairs.
Regardless of the circumstance, if lowering your rent would help ease your financial burden, even for a short period, it’s worth asking for. Just remember to clearly explain the situation and let your property manager know that this was out of your control and not a result of poor financial management.
2. Loss of job
When you signed your lease, you may have had a steady job that paid well. Now, you’ve lost your income and can’t make your monthly rent until you secure another job.
If this is your situation, you could write a rent reduction letter and explain the scenario to your landlord because they might work with you until you find new employment.
3. Took a pay cut
While you may still be employed, sometimes, you’ll be faced with a pay cut. If this happens, your income is suddenly less and bills are harder to pay. This scenario may qualify you for a rent reduction.
It is up to the landlord, but if you clearly explain your situation, they may negotiate with you.
4. Neighboring properties have lower rent
Generally, apartment complexes in the same neighborhoods have similar prices for rent. But, if you begin to notice that neighboring properties pay significantly less in rent compared to you, you could bring this up to your property manager in your rent reduction letter.
Landlords want to stay competitive with their pricing and have all of their apartments occupied and if they’re not, you can potentially leverage this for a lower rent.
5. Lacking common amenities
If your apartment complex lacks basic amenities like a laundry facility or covered parking stalls, you could use this to negotiate a reduction in rent.
Often, rent is more expensive when the property includes amenities like a playground, gym, on-site laundry and covered parking. If your apartment complex lacks these things, you could talk to your landlord about adjusting rent to reflect this.
6. Poor property upkeep
Everyone wants to live in a facility that is safe and clean. In fact, landlords are legally obligated to ensure that each apartment is habitable.
If you think your apartment is lacking general safety and sanitary measures, first, talk to your landlord about addressing that and second, use this to negotiate the price of rent.
7. The lease agreement is not being met by property managers
A lease is a legal contract that binds tenants and property managers to certain terms. Tenants agree to pay rent and keep their apartment clean and landlords agree to provide a safe and clean living environment.
If you believe this contract is not being met, you can talk to your landlord and ask for a rent reduction if the lease agreement is not being held up by both parties.
How much to reduce in rent?
So, you’ve decided that you will ask for a rent reduction but need to determine how much is reasonable to reduce. Well, this depends on a few factors like the city, neighborhood, amenities offered and your situation.
You need to assess how much would ease up your financial load while also being reasonable with your request. For example, you probably won’t get your landlord to reduce your rent in half and will likely get shot down immediately if you ask for that.
To determine a fair amount to ask for in your rent reduction letter you need to do your research. You can see what neighboring apartments are renting for; you can ask your neighbors how much they are paying and you can see what the average cost of rent in your city and state are.
If you come prepared with this information, you’ll likely have an easier time negotiating a fair rental reduction rate.
When and how to ask for a rent reduction
Once you’re ready to write a rent reduction letter, it’s all about when you send it and how you ask for what you need. The best time to ask for your rent reduction is right away because you don’t want to get behind on payments and then ask. When you first realize that you need a lesser rent payment, it’s time to start drafting your rent reduction letter.
The next best time to ask for a rent reduction rate is when your lease is up for renewal. It’s easier to draft up an entirely new lease than it is to rewrite an existing lease.
Ways to make a good case in a rent reduction letter
To make a good case for yourself, showcase that you are an outstanding tenant to your landlord. Here are some ways you can vouch for yourself to better your chances of getting a rental reduction.
Steady payment history
Have you always paid your rent on time, or even early? Have you had a steady payment history in the past? If this is the case, your property manager is more likely to sympathize with you and understand that you’ve truly fallen on hard times and could use a little wiggle room on your rate.
Show them your payment history and use this to your advantage.
Some money is better than no money
If you can still pay rent but just a lesser amount, some money is still better than no money. You can talk to your landlord and help them understand that you’ll still be paying rent and that they’ll still get an income, albeit a bit less than before.
Longer lease
Do you plan on staying at your current location long-term? If so, you can compromise and sign a longer lease at a lower rate.
Property managers want to keep their apartments occupied, so if you can sign a longer lease instead of month-to-month, they may reduce your rental rate.
Sample rent reduction letter
You can send the rent reduction letter via email or mail. Check and see how your landlord likes to receive communication and tailor your letter to that.
Follow our template below to create your rent reduction letter. Simply update everything in ( ) and you’ll be good to go.
Download the sample rent reduction letter PDF
Download the sample rent reduction letter Word Doc
(Your Name) (Current Address of Your Apartment with Unit Number) (City, State, Zip Code)
(Date)
(Landlord or Apartment Company’s Name) (Address as Printed on Your Lease) (City, State, Zip Code)
Re: Request to Lower Rent Payment for (Unit)
Hello (Landlord name),
This is (Your name) and I am a tenant in (Building #, Unit #). I’m reaching out to you because I’d like to discuss lowering my monthly rent moving forward. I enjoy living here and would like to continue renting from you, but my financial circumstances have changed and a reduction in rent would be incredibly helpful for me.
I’d like to highlight that I’ve lived here for (insert tenure) and in that time, I’ve always paid my rent on time, kept the apartment in great condition and have been a courteous neighbor and tenant. I believe I’m a great fit for this community and an exemplary tenant.
To make sure my request was reasonable, I’ve done research to see what similar complexes are renting for and what others are paying in rent. This makes me believe that a minor reduction in rent is reasonable and fair with the market.
I’d like to ask for a (insert dollar amount) reduction to my monthly rent, however, I’m open to negotiate and compromise. If you accept this request, I’d be able to continue my lease and call this home.
Can we schedule a time to meet and discuss this in more detail? I’m eager to find a way to make this work for both of us and find a compromise that meets both of our needs. Please let me know when we can chat.
Thank you,
(Signature) (Your Name) (Current Apartment Address and Unit Number) (Phone Number) (Email Address)
What to do if you can’t reduce your rent
Because it’s up to the landlord whether or not to reduce your rental rate, they may say no. If that’s the case, don’t get too stressed because there are still other options available to you.
Look for a new place
If you need to, you can find a new place to rent at a lower cost. You may have to wait until your lease ends or pay to break your lease but it may save you money in the long run to find a less expensive place to rent.
You can compare rental prices in different areas here.
Adjust your budget
It’s smart to reassess your budget to find out where you can save extra money. Maybe it’s something small like cutting back on your daily coffee habit or something more substantial like consolidating credit cards for a lower interest rate.
Either way, taking an honest look at your budget and seeing where you can save can help you make your payments and ease financial stress.
Pay rent bi-weekly instead of monthly
Sometimes, it’s a matter of adjusting your payment due dates that’ll make things a bit easier. For example, instead of paying your rent monthly in a large sum, ask if you can pay every other week so the payment itself is a bit smaller and leaves you with more money to pay your utilities and other bills.
Advocate for yourself
You have to advocate for yourself. No one else knows your struggles and if you don’t ask for what you need, you’ll never get it.
By writing a rent reduction letter to your landlord, you may get what you need which will enable you to get back on your financial feet.
The information contained in this article is for educational purposes only and does not, and is not intended to, constitute legal or financial advice. Readers are encouraged to seek professional legal or financial advice as they may deem it necessary.
There’s an upside to owning and managing properties.
Okay, so you’re thinking about managing your rental property, but you’re not sure if you should handle everything yourself or hire someone to do it for you. Let’s break it down.
According to a survey by the U.S. Department of Housing and Urban Development, almost half of the 49.5 million rentals in the U.S. are properties with one-to-four units. Most of these are owned by individuals, and only about 22 percent are professionally managed.
So, if you’re a landlord with a smaller property, chances are you’re the one taking care of things. But what does that really mean for you and your tenants? Let’s dive into the nitty-gritty of managing your property effectively.
What’s property management?
Think of property management as the secret sauce for your success as a landlord. It’s about making sure you’re getting the most out of your rental and handling your investment like a pro. Now, it might sound like a never-ending job, but there are four big things you need to focus on:
Finding and screening tenants
This is like picking the right teammates for your rental squad. You want reliable tenants who’ll treat your place well. So, there’s background checks, credit checks, employment verification – the whole shebang.
Keeping tenants happy
Once you’ve got good tenants, you want to keep them, preferably beyond even a yearly lease. Happy tenants mean steady income for you and years without having to worry about turning over the apartment. So, you need to build a good relationship, fix stuff when it breaks and maybe throw in a little incentive to keep them around.
Drawing up a lease agreement
This is like the rulebook for your rental game. The lease agreement is legally binding, so you want it to be solid. Some landlords get lawyers involved, others rely on experienced property managers to get it right.
Handling the money stuff
This is where you get into the financial side of owning and renting property. Budgeting, forecasting and understanding taxes are all part of the deal.
Why do people try property management as a side hustle?
Renting out properties has always been a favorite way to make some extra cash without doing much. As long as your rent is competitive and you’re not spending more than you’re making, it’s a sweet deal. Plus, in a good market, you can even build up some equity.
But here’s the catch – managing a rental property is not exactly a walk in the park. It involves marketing, managing, dealing with repairs and crunching numbers. That’s why a lot of new landlords end up hiring a property management firm.
Is now a good time to be a landlord?
Well, that depends on where you’re at and what you’re striving to get out of the deal. The rental vacancy rates in the U.S. were at 6.6 percent in the third quarter of 2023, a bit higher than the previous year but still below the long-term average. The rent and interest rates vary across the country, so you’ll need to do some homework on your local market.
The upsides of property management
Working with a property management firm can take a load off your shoulders. They handle things like rent collection, maintenance and dealing with tricky tenants. It’s like having a rental superhero on your team.
Potential downsides of property management
Of course, there’s no such thing as a free lunch. Property management firms charge a fee, usually between 8 and 12 percent of your monthly rent. So, if your place rents for $1,500 a month, you’re looking at shelling out around $150 to the management company. Also, some landlords like to be in the driver’s seat and make all the decisions, so giving up control can be a downside.
What about the tenant’s perspective?
If you’re looking to rent, you might be wondering if it matters whether your landlord is a person or a property manager. Well, it depends on what you’re into. Some folks like the perks that come with big managed communities, while others prefer the charm and personal attention you get from a home owned by an individual.
Should you hire a pro or DIY?
Ultimately, it’s your call. Take a look at your cash flow, monthly income and expenses. Do you want a laid-back income stream, or are you itching to get your hands dirty in property management? If you’re eyeing a real estate empire, a property management firm might be in your future.
In the end, whether you’re the landlord or the tenant, it’s all about finding the sweet spot that works for you.
At Rent., our goal is to be the most efficient digital resource to help people find and live in a place they love. We strive to help renters make informed decisions by providing them with valuable information and advice, including money-saving tips, local guides, HD photos and certified ratings and reviews from actual residents.
During the tenant screening process, landlords often need to sift through tons of applications from potential renters. With so much competition, how do you make yours stand out?
One way is by knowing exactly what essential information to fill out so you can complete the application quickly and correctly. You don’t want to leave anything out and risk your application being delayed or rejected. There are only a few pages to give the landlord a complete picture of you and what you bring to the table as a tenant. You need to show them that you’re a responsible and honest tenant who won’t cause property damage or fall behind on rent. Knowing how to fill out an apartment application to rent an apartment lets you prepare ahead of time. The faster you get your completed, well-rounded application in, the faster you may be in your new home.
Everything you need to include on a rental application
All rental applications are going to look slightly different, from the formatting to how the different sections are organized. But all rental applications should cover the following complete information.
1. Personal and contact information
Typically, the first section on a rental application will be for personal and contact information from the prospective tenant. It’s also an easy section to complete before diving into the rest of the application.
There will likely be a section for the day’s date for you to fill in. Then you can move on the rest of the personal information about the applicant: you.
Your full name
Current address
Phone numbers (include both your home and cell phone number)
Email address
Date of birth
Social Security number
Driver’s license number
If you don’t have a driver’s license, any kind of official, government-issued ID will do.
Other occupants
Most applications give you a section to add the name, age, and contact info for the other people you’ll be living with. But each person who is going on the apartment’s lease needs to fill out their own separate application with their own personal information. If you’re signing the lease with roommates or a partner, you’ll be submitting multiple applications.
This also helps the landlord follow proper health and safety laws and regulations in your area. They can’t have five people living in a one-bedroom apartment. It’s unsafe and against the law.
Know your rights
It’s also important to know what sensitive information a potential landlord legally cannot ask you. During the rental application process and listed on the rental application itself, you cannot be asked about:
Race
National origin
Sex or sexual orientation
Religion
Disabilities
2. Apartment information
Some landlords may include sections or lines for information about the specific rental property or unit. This could include the address, unit number, size of apartment or square footage. But it also may cover monthly rent, upfront costs and pet fees (if applicable).
Oftentimes, the landlord can or will fill in this section themselves to avoid mistakes or errors. After all, they’re the landlord and know all the essential information about the unit. If you do have to fill out this section yourself, just be sure to double-check that all the details are correct. You can also ask the landlord to look it over for verification.
This way, both you and the landlord or property manager are on the same page about exactly which rental property or unit you’re interested in leasing.
3. Employment history
One of the most important sections of how to fill out an apartment application focuses on your employment history. After all, your prospective landlord wants to make sure you can pay the rent on time and in full each month.
In this section, add details about your current employer or work situation. Include information like your job title, work address and how long you’ve worked there. You’ll also want to provide contact information for your employer. Landlords and property managers typically contact employers to verify the employment of a potential applicant.
This section also includes one of the most essential pieces of info for landlords: your income. After all, you need to prove that you have a steady stream of income from some source so you can afford rent. Depending on the application, it may ask for your hourly rate, annual salary or monthly income. It may also ask if you’re part time or full time. As proof of income, you’ll need to provide recent pay stubs or bank statements as part of your application. Requesting two to three months of pay stubs or bank statements is the norm.
If you have a big savings account, you can also provide evidence of this. If you’re between jobs, just started somewhere new or are self-employed with a variable monthly income, having a good nest egg assures landlords. You can also provide more employment history by attaching your work resume. This is only a good idea if your previous work history reflects well on you. If you tend to leave jobs quickly or aren’t on good terms with former employers, it can hurt your case.
It’s also OK if you don’t have a previous employer or just started a new job. There are other ways you can prove you’d be a reliable, trustworthy tenant.
Other sources of income
If you have other sources of income apart from a routine job, you can also give that information to the landlord. Other sources of income can include:
Inheritance
Annuity
Severance payment
Unemployment
Disability
Social security
This can help bolster your claim that you make enough money each month to cover rent.
4. Rental history
Landlords want to ensure that a potential tenant is responsible and reliable. As such, nearly every rental application will have a section where you can fill out your residence history.
You usually only need to provide information about your last one or two rentals, including your current one. Add details about the address, the cost of rent and your move-in and move-out dates.
You’ll also need to list the contact information for current and previous landlords. References from past landlords are one of the best ways landlords vet potential tenants. For that reason, it’s always a good idea to stay on good terms with your previous landlord, because they become potential references once you move out. A good recommendation from a property manager or current landlord who liked you can go a long way. It shows you paid rent on time, took good care of the property and are an upstanding tenant.
If you don’t have any rental history, don’t worry. You can ask a family member or someone you trust to act as co-signer. Some applications may have a brief section where you can indicate if you’re having a co-signer or who they are. Otherwise, mention it to the landlord so they can loop the co-signer in and send them any relevant documents.
5. References
Along with the landlord references, some applications let you provide character references to vouch for you as a person. Professional and personal references from colleagues, friends or co-workers help verify that you’re a reliable person and help the landlord get a good sense of your character. Most landlords won’t accept references from family members. This section should ask for reference names and contact information.
Not every landlord requires or adds this. If they don’t, you can sometimes attach signed letters of reference directly to the application. You can also attach a rental cover letter or renter resume to add a little more depth.
6. Extra details
Not all rental applications will need these extra bits of information, as it depends on the rental property and landlord.
Emergency contact
Just in case, some landlords ask for emergency contact information upfront. If you’re approved, they’ll add it to your file later. It also comes in handy if they can’t get in touch with you during the rental application process.
List an emergency contact’s name, phone number and their relationship to you.
Pets
Lots of renters these days have pets, so you’re likely to see at least one reference to whether or not you have pets on a rental application.
If you do, the landlord usually asks for more background information about the animal such as breed and weight. That way, if they don’t allow the particular animal, they’ll let you know sooner and save you and themselves the trouble.
In addition to knowing how to fill out an apartment application, having a pet resume is a good idea for these situations. Similar to a work resume, it covers all the essential information a landlord would need to know about your pet. Add details like the pet’s name, species, breed, weight and gender. Make sure to include updated vaccine information as well.
Vehicles
If the apartment has on-site parking available and the rental unit has a parking space, you can provide your vehicle information upfront. List the make, model, color and year of each car, in addition to the license plate numbers.
Smoking
Many landlords have strict rules regarding smoking on their properties. If they do, they’ll likely have a small section asking if you smoke or not.
7. Credit and background check permission request
As part of how to fill out an apartment application, landlords need to run a background check and credit check on prospective tenants. There should be a specific section for you to sign, giving the landlord permission to run these checks.
Prior to the credit and background check section, you may also be asked if:
You’ve ever been convicted of a crime
Broken a lease
Declared bankruptcy
Been evicted
These are all potential red flags for renting, but don’t always mean an immediate “no.” Having a heads-up they’ll appear on the background check is helpful. It also shows the landlord that you’re honest about your past.
8. Bank information for the application fee
To cover the costs of running background checks and getting a credit report, most landlords and property managers charge application fees. These fees also cover any administrative costs incurred while processing the application. Within this section, list relevant information such as:
Bank name
Bank address and phone
Bank account number
Credit obligations (loans) with a monthly payment
Some applications will have a list of these fees. That way, you know what to expect.
9. Sign on the dotted line
Rounding out how to fill out an apartment application form is the signature section. Both you and the landlord should sign and date it. The signatures validate the document and serve as proof of payment.
This section wraps up the application. Congratulations, you’re done and have officially applied to a new apartment! Now comes the waiting to see if you beat out the other applicants and are the right tenant the landlord is looking for.
Completing the rental application process
After you’ve filled out rental applications with all the requested information, it’s time for you to sit back and wait to hear if your application has been accepted. During this time, the landlord does their screening reports. The tenant screening can take anywhere from two to three days. Sometimes it takes longer if it’s taking the landlord a while to verify some of your information.
Being accepted to your new apartment
Once you hear the good news that you’ve been accepted, you have a few final steps to follow before hiring movers.
Pay the security deposit and the first month of rent payments
As you finalize the rental process, you’ll need to pay for the security deposit, first month’s rent and any move-in fees.
Generally, writing personal checks is the easiest way to handle this transfer. But increasingly, modern-day renters prefer the ease and convenience of online portals. That way, they can pay rent, review the lease agreement, request maintenance repairs and more in one place.
Sign the lease
Once you’ve reviewed the lease and everything is in order, officially sign the lease to make the apartment yours (temporarily).
A rental application form template
To give you an example of what some apartment applications may look like, check out our sample template. You can also download this PDF or Word document template if you want to practice or get all the information in one place.
Know what to expect when filling out a rental application
Renting a new apartment can be a hassle. But by knowing how to fill out an apartment application, you can prepare in advance to help the process go smoothly and efficiently.
The information contained in this article is for educational purposes only and does not, and is not intended to, constitute legal or financial advice. Readers are encouraged to seek professional legal or financial advice as they may deem it necessary.