By Nate Bernstein
Hiring a property management company can relieve an owner of many of the day-to-day responsibilities involved in operating and maintaining an investment property. At the same time, delegating those responsibilities to a management company does not mean giving up oversight of your asset. A well-drafted property management agreement should establish what the management company is responsible for, what authority it has, what it can charge, what information it must provide, the company’s duties and liabilities, and what protections remain available to the owner.
Property management agreements are often written in broad terms, which can create problems when the owner and manager later have different understandings about what services are included, what decisions the manager can make, or what expenses the owner is expected to pay. Before signing a management agreement, the owner should identify these issues and address them clearly in writing. A well-drafted agreement should not only delegate day-to-day responsibilities, but also establish clear limits on the manager’s authority while preserving the owner’s ability to monitor and protect the investment.
The following are practical considerations for an owner to address when negotiating a property management agreement.
#1. Clearly Define the Property Manager’s Duties and Scope of Services
Property management agreements tend to be very general. If you want the property manager to perform specific tasks on a weekly, monthly, or annual basis, those duties should be set out in an addendum that is incorporated into the contract. The addendum should identify the task, the applicable timeframe, and the due date for completing it.
This is important because the owner and property manager should have a clear understanding of what the management company has agreed to do. The agreement should distinguish between ordinary management duties included in the management fee and additional services that require the owner’s prior approval and, where applicable, an additional fee. If the owner expects the manager to perform specific tasks on a weekly, monthly, or annual basis, those responsibilities should be identified in an addendum incorporated into the agreement, together with any applicable deadlines. Any additional task that is outside the agreed scope of services should require the owner’s approval in advance, particularly when performing that task will result in an additional fee or expense. The more specific the parties define the manager’s responsibilities and the scope of services, the less room there is for disagreement later about what the property manager was hired to do or whether an additional charge was authorized.
#2. Establish Specific and Measurable Performance Standards to Achieve Financial Goals
The management agreement should also address goals for the performance of the property, such as vacancy factor, expense ratios, parking revenue, and liability controls.
An owner should try to turn broad promises about “good management” into specific and measurable expectations. For example, rather than simply stating that the property manager will monitor vacancies, the agreement could establish what the manager is expected to do when a unit becomes vacant and how quickly those actions must occur.
The same principle can apply to other areas of management. If the owner has particular expectations concerning expenses, vacancies, reporting, parking fees, or liability controls, those expectations should be sufficiently clear that the owner and manager can determine whether they have been met.
The agreement should also address what happens if the management company consistently fails to meet the agreed performance standards. The parties should determine whether the standards are intended to be goals or contractual obligations and whether repeated failure to meet them can constitute grounds for penalties, fee reductions, and termination of the management agreement.
The goal is not to make every aspect of property management rigid. Rather, it is to ensure that important expectations are specific enough to be measured and enforced, instead of being left as vague promises that may be difficult to evaluate later.
#3. Review Financial Reporting and Require Timely Documentation
Financial reporting is one of the most important ways an owner can monitor what is happening with the property. The owner should review and audit the monthly, quarterly, and annual financial reports provided by the management company and look for charges that appear vague, unnecessary, padded, or otherwise unsupported, as well as income that appears to be missing. If a charge is unclear or appears unjustified, the owner should be able to request receipts, documentation, bank and financial records, payroll records supporting the charge, and identification of the staff member who performed the work. The agreement should also permit the owner to review payroll information when appropriate.
The timing and content of financial reporting should be addressed in the management agreement. The agreement should establish how often reports are provided, exactly what they must contain, and the date by which each report must be delivered. Depending on the arrangement, the parties may establish weekly, biweekly, monthly, quarterly, or annual reporting requirements. Include a provision in the agreement requiring the management company to provide a line-item written accounting, a specific explanation, and supporting documentation within 7 calendar days upon demand.
An owner should not have to wait indefinitely for an explanation of a charge or for documentation supporting the financial activity of the property. Establishing the rules and deadlines for reporting requirements in advance gives both sides a clear understanding of what information must be provided and when.
#4. Identify All Compensation and Fees
To protect the income generated by the property, specifically delineate the total compensation paid to the property management company and its managers. This includes monthly compensation, annual compensation, bonuses for leasing, and any other compensation connected with management of the property. Scrutinize, object to, and challenge compensation components that are not approved in the original agreement.
The contract should identify every fee the owner may be charged, not just the property management company’s basic compensation. An owner should not sign a contract where the management company’s compensation is clear, but the additional ways in which the management company can make money from the property are not transparent.
For example, the agreement should make clear whether there are separate charges for leasing, property management services, administrative work, or other services beyond the basic management fee. The owner should understand what each fee is for and under what circumstances it can be imposed.
A clear and specific line-item compensation provision protects the owner from unexpected charges and makes it easier to determine the actual cost of having the property managed.
#5. Confirm Insurance Coverage
Confirm that the property management company is adding the owners and main investors as insureds on all the applicable insurance policies, and that renter’s insurance is being purchased by tenants.
The owner should confirm what insurance coverage is required, who is covered, and whether the required coverage is actually in place. Multiple insurance quotes should be obtained to help secure the best available coverage in the current insurance market. The management agreement and the applicable insurance documentation, such as declarations pages, should be reviewed together.
It is important to know what protections are actually in place rather than relying solely on a general statement in the management agreement that insurance will be maintained. You should determine whether you want to purchase excess insurance, such as an umbrella policy, to protect your financial interests.
#6. Maintain Emergency, Crisis, and Tenant Problem Reporting Procedures
Emergency and crisis reporting at the premises should be addressed expressly in the management agreement. Have a provision requiring that any emergency or crisis be reported to the principals immediately. There needs to be a property manager that can receive emergency calls 24 hours per day, 7 days per week. The property management company needs a written emergency and crisis plan in place.
The agreement should specify what constitutes an “emergency or crisis” requiring immediate notification. It should also distinguish between ordinary tenant issues that the manager handles independently, significant tenant problems that require notification, emergencies that require immediate notification, and situations in which the manager is authorized to take immediate action without waiting for owner approval.
This distinction is important because a property manager will ordinarily be expected to handle many routine tenant matters without involving the owner in every decision. At the same time, the owner should know when a tenant problem has escalated and become significant enough to require the owner’s attention.
Nuisance tenants and their units should be reported to the principal, together with a plan of action. Depending on the circumstances, that plan will involve taking notes in the form of a timeline, a letter, a notice, or the start of an eviction proceeding.
The parties should establish these reporting procedures before a serious problem occurs so there is no uncertainty about when the owner must be notified and what action the manager is authorized to take.
#7. Require an Express Indemnity Provision that Protects the Owners and Investors
The concept of indemnity is an important legal consideration and protection for an owner.
Indemnity is by definition a legal obligation where one party agrees to provide financial protection to another party against specified potential losses, typically involving a payment of compensation. Indemnity clauses are common in various agreements, ensuring specific terms are met and risks are covered, akin to a safety net in business and insurance contracts. Indemnity can be expressed by contract or implied under the law.
You should always have language requiring the property management company to indemnify the owners and principals for claims related to management of the property.
Because an indemnity provision can vary substantially in its scope, the owner should examine what the provision actually covers. Consider what types of claims the management company is agreeing to indemnify, whether the provision covers the manager’s negligence or misconduct, whether there are exclusions, and whether the management company’s indemnity obligations are limited by another provision of the contract. Strive for broad indemnity provisions to be placed in the management contract to hold the property management company accountable.
The owner should not assume that every indemnity provision provides the same protection. The actual language matters. The owner should understand the circumstances in which the management company will be responsible for a claim and any limitations placed on that responsibility.
Some of these risks can be addressed with insurance. Other risks cannot, so make sure you have a broad express indemnity provision.
8. Avoid Sweeping Limitation of Liability Clauses
Property managers will often try to limit liability and types of damages caused by their errors and omissions. Do not agree to sweeping limitation of liability clauses. The property manager needs to be accountable for losses, special damages, and consequential damages that he or she causes.
Owners should carefully review the language of any provision that limits the property manager’s liability. Watch out for provisions that place a dollar cap on the manager’s liability, broadly release the manager from liability, exclude particular types of damages, or excuse the manager from responsibility for specific mistakes or failures.
These provisions can substantially affect the owner’s ability to recover losses caused by the property manager. The owner should understand exactly what liability is being limited before agreeing to the provision.
A limitation of liability provision should not be treated as “routine boilerplate.” It can materially affect the owner’s rights if the management company makes a mistake that causes a loss.
#9. Strive for Cost Benchmarks for Hiring Legal Counsel
The method and cost for hiring legal counsel is an important factor in the management relationship. Some property managers hire in-house counsel to save money. For many legal matters, it is better to have outside counsel.
You should have cost benchmarks for legal services such as non-jury eviction trials. The property management company should obtain estimates for pretrial and trial services for evictions.
The management agreement should also address the property manager’s authority to retain legal counsel and whether owner approval is required before legal services are incurred. Establishing cost benchmarks in advance can give the owner greater control over legal expenses associated with managing the property.
The owner should understand not only that the property manager can obtain legal services when necessary, but also how those services will be approved and what costs the owner should expect.
#10. Achieve Cost Saving Benchmarks and Address Conflicts of Interest for Third-Party Contractors
Property managers tend to get “very cozy” with certain third-party contractors. For projects above a certain cost level, you can require that there be multiple bids for the project, disclosure of prior contracts, and disclosure of past problems and conflicts with that contractor. This encourages competition and price efficiency and can reduce the risk of collusion, conflicts of interest, or other improper conduct arising from the property manager’s repeated use of the same contractor.
The management agreement should also address potential conflicts of interest involving third-party contractors. The owner should consider whether the management company can use an affiliated contractor, receive a referral fee or other compensation from a contractor, or mark up a contractor’s invoice.
The agreement should require disclosure and transparency of the details of any relationship between the management company and a contractor. It can also require multiple bids above a specified amount. These provisions give the owner greater visibility into how contractors are selected and whether the manager has a prior financial relationship with a contractor being hired to perform work at the property.
Require that a list of all third-party contractors, handymen, and repair staff be provided to the owners for review.
The goal is not necessarily to prevent the management company from using contractors with whom it has an established relationship. Rather, the owner should understand those relationships and have a process in place for evaluating significant expenditures and potential conflicts of interest, past problems with contractors, and the potential for corruption.
#11. Establish Rent Collection and Delinquency Procedures
Rent collection is a fundamental part of managing an income producing property, and the management agreement should establish how delinquent rent will be handled.
The contract should establish when rent is considered delinquent, what the manager must do when the rent is not paid, when notices are sent, when the owner is notified, and how payments are handled. The property manager should be aware of rent delinquency thresholds in the local jurisdiction that are mandated prior to starting an eviction for non-payment of rent.
The agreement should also make clear the property manager’s authority and responsibilities when rent is not collected. The owner should know what steps the manager is expected to take and when the owner will be notified about a delinquent account.
Establishing these procedures in advance helps ensure that the owner and manager have the same expectations regarding rent collection and delinquency.
#12. Define Leasing and Tenant Selection Authority
The management agreement should establish who sets the rental rates, who approves applicants, what screening process is used, who negotiates lease terms, whether the manager may offer concessions, and whether the owner must approve leases above or below specified parameters. Require the property managers to perform employment and credit score background checks.
The central issue is how much discretion the property manager has when putting tenants into the owner’s property. The owner should understand which leasing decisions the manager can make independently, and which decisions require owner approval.
The agreement should therefore define the manager’s authority over rental rates, applicant approval, tenant qualification and background screening, lease terms, and concessions. The more discretion the manager has, the more important it is that the limits of that discretion are clearly understood by both parties.
#13. Preserve the Owner’s Property Access and Inspection Rights
An owner may not want to handle every day-to-day management issue, but the owner should not lose access or visibility into the owner’s own investment. The management agreement should address the owner’s ability to inspect the property even though the manager is handling its day-to-day operation.
The parties should establish reasonable procedures for owner inspections and access. The owner should be able to remain informed about the condition and operation of the property without having to take over routine management responsibilities.
The management relationship should provide the property manager with the authority necessary to perform the job while preserving the owner’s ability to monitor the investment.
#14. Delineate Clear Termination and Transition Procedures
Termination of the relationship should be addressed before the management agreement is signed. You should have the right to terminate the relationship within 2 weeks of written notice. The right of the owners and investors to terminate the property management company should be designated as “at will” and should not require any “just cause,” factor, or reason.
The agreement should also establish what happens when the relationship ends. Upon termination, the principals are entitled to all computer files, written records, and an accounting of all activity.
The transition provisions should specify when records must be delivered and how the transfer will be handled. This should include electronic files, keys, access codes, tenant records, utility system information, government registration, and other property or information necessary to continue management of the property.
The agreement should make the transition process clear so that termination of the management relationship does not leave the owner without the records, information, access, or other materials necessary to continue operating the property.
Concluding Thoughts
As an owner or investor, you have important rights when it comes to negotiating a property management agreement. You should develop a simple checklist of all issues you are concerned about. The terms and conditions of the written agreement are negotiable, and you should come into the negotiation in a position of strength with an open mind.
Setting up a well-drafted agreement with the property management company of your choosing is good asset protection planning to protect your valuable asset and your own interests as an investor. You should show the agreement to your legal counsel, and have counsel critically evaluate the terms and conditions of the agreement. Then you can negotiate the best deal.
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By Krista Reuther
While trying to fill a vacant rental, you might stumble across an applicant who seems perfect. They say they have good income, claim they haven’t been evicted, and appear trustworthy. However, if you don’t vet their information with a tenant background check for landlords, you could end up with a tenant who creates months of stress and costs you thousands of dollars.
A background check lets you verify a tenant’s full financial and rental history rather than unquestioningly trusting everything they tell you. Tenants can easily embellish self-reported information on an application, but a background check cuts through the noise and shows you exactly who wants to live in your property.
In this article, you’ll learn what these reports contain, how to read the results, and how to run a check in minutes. By the end, you’ll know how to screen applicants and catch red flags before signing a lease with the wrong tenant.
What is a tenant background check?
A tenant background check is the first foundational step toward securing a reliable renter. Running one gives you a report that pulls a renter’s criminal history, credit report, and eviction records, so you can confirm who will be living in your property and paying you rent.
As a landlord, you can’t simply run background checks whenever you want, though. You must obtain an applicant’s written permission before running a report and follow all applicable landlord-tenant laws throughout the process.
Pro tip: Professional tenant screening tools automatically obtain the applicant’s permission before running reports, so you don’t have to chase signatures or juggle extra paperwork.
What does a background check include?
Typically, a rental application background check covers three main areas: criminal history, credit history, and eviction records. Together, these reports give landlords a much clearer, audit-ready picture of a tenant than a rental application alone.
Criminal History
A criminal background check for renters pulls thorough records from federal and state databases to show the applicant’s past legal offenses, if any. For instance, let’s say two applicants both show a misdemeanor from 8 years ago: one involved property damage at a prior rental, and the other was a college-era public intoxication charge. Only one of those speaks to how the tenant may treat your unit. Context matters.
State laws also vary. For example, Texas has no state-level limit on how far back landlords can look or which convictions they can weigh. California, on the other hand, prohibits landlords from citing arrests that never led to a conviction, sealed or expunged records, or blanket “no felons” policies (Cal. Code Regs. tit. 2, §§ 12264-12271).
Credit Report
A credit check for renters itemizes an applicant’s credit score, loan repayment history, outstanding debt, and collections accounts or bankruptcies. Payment history alone accounts for 35% of a FICO Score, the single biggest factor. Weigh payment history over the raw score, as it will signal whether the applicant reliably pays their rent (and other bills) on time.
Eviction History
One of the biggest red flags for a new tenant? Prior court filings or eviction judgments against them. Eviction records will show you whether a renter has a delinquency cycle, which can signal future trouble should you choose to rent to them. Some renters with past judgments are also judgment-proof, meaning there’s little left to collect even if you win a case against them.
As with criminal history, some states limit how landlords can obtain and use eviction records in housing decisions. Always read up on your state’s landlord-tenant laws to make sure you’re within your legal rights before denying a tenant based on their eviction history.
Why run a background check on a tenant?
Beyond confirming the information a tenant included in their rental application, a background check will reveal details renters might not otherwise report (often the ones that matter the most in a housing decision). Here’s how wise landlords run checks before signing a new lease:
Catch Red Flags Before You Sign
Tenant background checks for landlords surface common red flags like prior evictions, collection accounts, criminal convictions, or information that contradicts what the applicant reported. Spotting these issues early helps you flag difficult, delinquent, or litigious renters and avoid the property damage, criminal activity, or unpaid rent that come along with them.
Protect Yourself Legally
A consistent, document-first tenant screening process creates a recorded set of standards that holds every applicant accountable to the same criteria while staying within the bounds of Fair Housing laws. To justify an application denial, you can point to your screening process and reports on file rather than relying on your memory.
Keep records: Retain reports and denial notices for at least 2 years in case disputes arise, so you can always prove you complied with the Fair Housing Act when selecting tenants.
Keep Your Community Safe
One renter’s history can affect much more than their landlord. Whoever moves into a unit shapes the experience of other tenants and neighbors (and the condition of the property itself). Beyond protecting your own interests as a landlord, tenant screenings are a core part of being a responsible rental property owner.
Find Tenants Who Stay
Every landlord wants to rent to high-quality tenants who pay rent on time every month, respect the property, and, ideally, decide to renew their leases. A background check is your best opportunity to find these renters during the application phase, thereby cutting your turnover, vacancy costs, and the revolving door of short-term renters.
How to Read a Tenant Background Check
Running a tenant background check for landlords is the first step. Once you have the reports, you’ll need to know what the numbers and facts all mean. Here are a few common questions that come up after the results arrive:
What credit score should a tenant have?
Your minimum credit score requirement depends on your local rental market and your risk tolerance. The mean U.S. credit score hovers around 715, though renters tend to have lower-than-average credit scores. With these factors in mind, most landlords typically want tenants to have a credit score of at least 600.
Look beyond the number: An applicant with a low score but a spotless payment history can be a safer bet than one with a higher score and a history of recent late or missed payments. Before making any decisions, evaluate the meaning behind the score.
How should landlords evaluate criminal history?
Never use “blanket bans” to deny every applicant with a criminal history. Instead, if a background check uncovers a criminal past, consider the type of offense, when it happened, and whether it shows a behavioral pattern. Per federal law, you must apply the same criteria to every applicant to ensure fair tenant selection. (And don’t forget to reference state laws, as some add further protections.)
How far back does a background check go?
Under the Fair Credit Reporting Act, most negative credit information won’t be on a report after 7 years. Many screening services follow that window, though some states have shorter limits on criminal and credit history. With that in mind, certain serious convictions may still appear on reports past the standard time frames, depending on the provider and jurisdiction.
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How to Run a Tenant Background Check
No matter which service you use to run a tenant background check for landlords, doing so takes a few important steps. Property management software like TurboTenant can send digital applications that automatically gather everything you need to run background checks on all applicants.
Here’s what you need to do:
- Collect a completed rental application: Anyone who wants to live in your property must fill out a rental application and provide their personal and financial information. The application will ask for income, employment, rental history, and references, and give you enough information to run the tenant screening.
- Charge an application fee: Landlords typically charge a tenant-paid application fee of $35 to $75 per applicant, with TurboTenant’s own screening fee landing between $45 and $55.
- Request the applicant’s consent: During the application process, ask the tenant for their written consent to run a background check. Federal law prohibits landlords from running background checks without consent. Property management software handles this step automatically.
- Run the report through a tenant screening service: Tenant screening services do the heavy lifting for landlords by pulling credit, criminal, and eviction records from public databases and reporting sources. Once complete, the report provides landlords with a clearer view of the applicant’s rental risk.
How long does it all take? With most online screening services, landlords receive reports within minutes. However, checks that require crossing multiple jurisdictions or income verification can sometimes take a day or longer to complete.
Legal Requirements Landlords Need to Know
Though tenant screening laws may vary at the state, county, or even city level, two federal laws regulate tenant screenings nationwide. The Fair Credit Reporting Act (FCRA) governs the use of credit reports in housing decisions, while the Fair Housing Act (FHA) prohibits discrimination in all housing transactions.
Fair Credit Reporting Act: Under the FCRA, landlords must get the tenant’s written consent to perform a background or credit check. If a landlord denies housing based on information in a background check or credit report, they must notify the applicant of an adverse action, which must state:
- The reason for denial,
- The name and contact information of the company that generated the screening report, and
- The tenant’s right to dispute any inaccuracies.
Skipping this step can appear to be a bad-faith decision, even if a landlord’s reasoning was sound.
Fair Housing Act: The FHA prohibits landlords from discriminating against applicants based on the following protected characteristics:
- Race
- Color
- National origin
- Religion
- Sex, including sexual orientation and gender identity
- Familial status
- Disability
Under the FHA, landlords must also apply the same screening standards to every applicant. Importantly, every state has its own Fair Housing laws in addition to the federal law, and certain states further restrict criminal history review. As always, check your local laws.
Always keep documentation: Document your screening criteria and review local laws before accepting rental applications, and store every screening report and denial notice. An airtight paper trail can help protect you against accusations of discrimination or other legal violations.
Tenant Background Checks are Your First Line of Defense
Thorough background checks belong in every landlord’s rental workflow. Skipping it means gambling with your rental income and property, while a few minutes of due diligence at the start of a tenancy can remove much of the guesswork involved in finding a new renter.
This essential step verifies an applicant’s claims, uncovers red flags, and keeps you compliant with federal and state law. A compliance-minded screening process is one of the highest-return habits a DIY landlord can build.
To make tenant screening easier, use TurboTenant to run tenant-paid background and credit checks in minutes. Our software will handle the rental application, tenant consent, and report generation in a single streamlined process, so you don’t have to string together multiple tools to get the job done.
Sign up for a free TurboTenant account today to start filling your rentals with upstanding tenants.
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Listen On:
ESA rules for landlords got a lot of attention in 2026. In May, HUD changed how it handles emotional support animal complaints. Landlords everywhere read the headlines and celebrated. Kevin did too. Then he kept reading, and his excitement faded fast. The key word in all of this is complaints, and once you understand why, the whole picture changes.
Before we dig in, I answer a listener text about something that has frustrated more than a few of you. If you have ever tried to find an episode we mentioned and come up empty, this part is for you. In fact, digging into it led us to a glitch on our own website that we did not know existed.
Then I walk through what HUD actually changed and what the old ESA rules for landlords expected of you. I also cover the one thing about the Fair Housing Act that did not change at all. And yes, I get honest about the online ESA letter industry, because it frustrates landlords and people with a real need alike.
Next, Kevin takes what he calls the “read the fine print before you celebrate” segment. He covers three big things that stayed exactly the same, plus the basics that were never going away. From there, we compare our own rentals in California and Idaho. These two states handle ESA requests very differently, and our portfolio shows exactly why. You will hear about an ESA cat in Idaho, plus a black light walk-through Kevin will never forget. Spoiler: the ESA was not the problem.
Finally, we wrap with a seven step game plan for putting the current ESA rules for landlords to work on your next request. That includes a quick Google search shortcut, and why my facial expressions might be a fair housing liability. Kevin’s words, not mine.
What You’ll Learn in This Episode
- What HUD changed on May 22, 2026, and why the key word is complaints
- What the old ESA guidance expected landlords to waive
- The one thing about the Fair Housing Act that did not change
- Why the online ESA letter industry makes everyone more skeptical
- Three things that did not change, and why they matter before you celebrate
- How trained assistance animals are still treated
- Why California and Idaho handle ESA requests so differently
- What we did when an Idaho tenant had an ESA cat, and what cat spray really costs you
- A Google search shortcut to find your own state, county, and city rules
- Why your pet process and your accommodation process should stay separate
- The one offhand comment that could become exhibit A
- Our seven step game plan for the next ESA request
- How to find any past episode we mention, on any platform
Key Takeaways
1. HUD Changed Enforcement, Not the Law
HUD’s May 2026 memo changed which assistance animal complaints its own investigators will pursue. However, Congress did not amend the Fair Housing Act. That difference matters more than any headline, because tenants still have options outside of HUD. In the episode, Kevin explains exactly what those options are.
2. ESA Rules for Landlords Still Depend on Your State
Your exposure depends on where your property sits on the map. Some states protect emotional support animals whether or not the animal is trained. Others lean almost entirely on federal law. We own in both kinds of states, so we walk through California and Idaho side by side. Therefore, before you change anything, check your state, county, and city rules. Kevin shares a simple search shortcut to get you started.
3. Trained Assistance Animals Are Still Protected
A dog trained to perform tasks for a person with a disability is a different conversation than an untrained ESA. Those requests are still treated as reasonable. Furthermore, the basics never went away. Every request still gets an individual look, and you still never ask for a diagnosis.
4. Keep Pets and Accommodations Separate
A pet application and a reasonable accommodation request are two different things. Your lease, pet addendum, screening criteria, and listing language should all say the same thing. Most importantly, none of them should promise more or less than the ESA rules for landlords in your area require.
5. Lead With Respect and Document Everything
Most people asking for an accommodation are not trying to pull one over on you. So respond promptly, put everything in writing, and talk to a professional before you deny. And make sure everyone who answers your phone knows what not to say. That includes your spouse, according to Kevin.
Links & References Mentioned in This Episode
Episode 61: Fair Housing and Emotional Support Animals (ESA’s) — our original deep dive on ESAs and fair housing
Episode 36: ESA Insights and Pet Rules, An Interview with Logan Miller of Our Pet Policy — Logan Miller on verifying ESA certificates, plus a couple of juicy stories
Our Pet Policy: The pet and ESA verification platform Logan Miller talked about in Episode 36
HUD Enforcement Memo on Assistance Animals (May 22, 2026) — the federal memo itself
California Civil Rights Department Legal Alert on Emotional Support Animals (July 20, 2026) — the California example we discuss
DoorLoop: The landlord management software we recommend for larger portfolios
TurboTenant: Great landlord management software for newer landlords
Avail: Free Landlord Software
Innago: Free landlord software with online rent collection
EZ Landlord Forms: State-specific lease documents, notices, and addendums
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Legal Disclaimer: Nothing in this episode constitutes personalized legal or financial advice. Always consult a licensed real estate attorney or CPA for guidance specific to your state, city, and situation.
By Leslie Tucker, Esq.
Across the country, more states and local governments have been moving toward laws that prevent landlords from having blanket “no Section 8” housing policies. But a New York appellate ruling has brought a new question to the surface:
When a state requires a landlord to accept Section 8 vouchers, does that also require the landlord to accept the inspections, access to records, and contract obligations that come with the federal Housing Choice Voucher program?
This question sits at the center of a New York case involving source-of-income discrimination, Section 8 housing assistance, and the Fourth Amendment.
The court does not conclude that the Section 8 program itself is unconstitutional or eliminate all source-of-income protections. But it does create a serious compliance question for New York and a warning signal for other places with similar laws.
THE BACKGROUND: THIS WAS ABOUT MORE THAN RENT PAYMENT
New York’s Human Rights Law protects against discrimination on the basis of lawful source of income in housing, including wages, public assistance, Social Security, child support, alimony, foster care subsidies, and housing assistance such as Section 8 vouchers.
This means that housing providers could not simply say “no Section 8,” refuse voucher applicants, delay applications because of a voucher, or treat voucher holders differently because of how rent would be paid.
The case began after two prospective tenants alleged that Ithaca landlords refused to rent to them because they used Section 8 voucher.
WHAT THE COURT RULED
The court recognized New York’s housing affordability concerns and the role Section 8 plays in expanding access to housing. However, it held that New York’s source-of-income law was unconstitutional to the extent that it required landlords to accept Section 8 vouchers.
The concern was not the voucher payment itself but the program obligations attached to it, including inspections, access to records, and the HAP contract. In the court’s view, requiring landlords’ assistance. The New York Attorney General brought an enforcement action, arguing that the landlords violated New York’s source-of-income discrimination law.
The landlords challenged the law, arguing that mandatory voucher acceptance effectively forced them into the federal Housing Choice Voucher program, which involves mandatory inspections, rent reasonableness reviews, access to records, and a Housing Assistance Payments contract. The
landlords were asking the court to view Section 8 as more than just another way rent is paid, but rather on what accepting a voucher requires after approval. to accept those obligations as part of source-of income compliance raised Fourth Amendment concerns.
The ruling was narrow. It did not strike down the Section 8 program altogether or eliminate all source-of-income protections. It focused specifically on mandatory Section 8 acceptance and the government access and contract requirements that come with the Housing Choice Voucher program.
WHAT THIS MEANS FOR NEW YORK HOUSING PROVIDERS
For New York housing providers, the ruling creates a serious compliance issue, but it should not be treated as permission to ignore source-of-income protections.
After the Appellate Division ruling, the case moved to the New York Court of Appeals, the state’s highest court. That means the Appellate Division decision may not be the final word. New York law also provides for a stay of enforcement in certain appeals involving the state or a state officer or agency.
In practical terms, housing providers should not assume they can now refuse Section 8 applicants based on this ruling alone. The New York Attorney General continues to describe lawful source-of income discrimination as illegal, identify Section 8 vouchers as protected, and accept source-of income discrimination complaints.
The safer takeaway is this: New York housing providers should continue treating source-of income compliance as active and should not make voucher-related policy changes without legal guidance.
WHY OTHER STATES SHOULD PAY ATTENTION
The issue behind this ruling is not limited to New York. Many states and local governments have source-of-income protections, and some specifically prohibit discrimination against Housing Choice Voucher holders. In some of those jurisdictions, there have been similar challenges based on the same arguments as those made in this case.
The ruling in this New York case does not mean that other jurisdictions’ source of income laws are
automatically unconstitutional. Different states may have different statutes, procedures, ordinances, or
constitutional standards. But the New York ruling will certainly become part of the conversation in
places where voucher acceptance is mandatory.
The key question for other states is this: Does the law require voucher acceptance in a way that effectively requires housing providers to participate in the Housing Choice Voucher program and
accept inspections, records access, and contract terms that may raise constitutional concerns?
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HOUSING PROFESSIONALS SHOULD USE THE WATCH METHOD
When a ruling like this comes out, it is easy to either overreact or dismiss it as someone else’s problem.
The better approach is to stay alert, understand your local requirements, and avoid making rushed policy changes. The WATCH method gives housing professionals a simple way to remember the next steps:
WATCH THE ISSUE WITHOUT JUMPING THE GUN.
This case is now before New York’s highest court, so housing providers should not treat the Appellate Division ruling as final permission to change voucher policies.
ASSESS YOUR STATE AND LOCAL REQUIREMENTS.
Source-of-income protections often exist at the state, county, or city level, and the rules can vary widely.
TRACK AGENCY AND COURT UPDATES.
In New York, watch the Court of Appeals, state agencies, local governments, public housing agencies, and local human rights commissions.
CONSULT LEGAL COUNSEL BEFORE CHANGING VOUCHER POLICIES.
A blanket voucher-refusal policy may still pose a risk, depending on the jurisdiction, advertising rules, and enforcement guidance.
HANDLE APPLICANTS CONSISTENTLY AND CAREFULLY.
Avoid rushed decisions, inconsistent treatment, or statements that could create a separate fair housing risk.
THE BOTTOM LINE
New York’s ruling does not end source-of-income protections or invalidate the Section 8 program. But it does raise a serious constitutional question about mandatory voucher acceptance. For New York, the immediate issue is the tension between source-of-income protections and Fourth Amendment concerns. For other states, the ruling is not a command. It is a caution sign.
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According to the media and average Americans, landlords are all rich, lazy leeches growing fat off of honest workers.
It’s an easy narrative to spin. Too bad the numbers prove it’s not true in the slightest.
Most landlords actually lose money. I did, back when I still bought properties directly.
Here’s why so many landlords quit—and a few alternative ways to invest for the same cash flow, appreciation, and tax benefits without all the headaches and costs.
Average Landlord Size
What’s the most common portfolio size among landlords?
To hear the media tell it, you’d think those evil landlords own entire blocks and neighborhoods. But a study by Doorloop found the most common portfolio size is exactly one unit (42% of landlords).
That’s right: Most landlords own just one unit.
Another 33% of landlords own two to four units (often a single property), and another 16% own five to 10 units. That means 91% of landlords own 10 or fewer units.
In fact, a quarter of landlords never intended to own rentals in the first place. They became accidental landlords when they struggled to sell their home and ended up just renting it out instead.
That’s hardly the stereotype of a rich, greedy landlord that owns hundreds of units “exploiting the working man.”
Soaring Costs
You already know that home prices soared 55% between 2020 and 2025. But that’s not the only ownership cost that’s surged.
Property insurance premiums spiked 24% between 2021 and 2024. Property taxes are up 30% since 2019. As for building material prices, they’ve exploded 44% since 2020.
Meanwhile, rents are down around 5% over the last year, per Zillow.
The bottom line? It’s much harder to make rental properties pencil strong cash flow than it was before the pandemic.
Landlord Results
The Doorloop study found only a third (35%) of landlords say their properties are profitable year after year. The other two-thirds see only intermittent profits—or consistent losses.
This is precisely why just 44% of landlords have any interest in buying more rental properties. And even that unassuming number is up from a shoddy 35% in 2023.
Landlords aren’t exactly hitting it out of the park—or clamoring to keep playing the game at all.
Why Most Landlords Don’t Want More Units
I’ve owned dozens of rental properties over the years. At one point, I went to inspect a recently vacated property. The garbage was piled two to three feet high throughout the entire property, and I had to walk on top of it to get around and take photos.
All the curtains were closed, so it was dark despite being daytime. At one point in a dark room piled high with garbage like everywhere else, I stepped on something particularly squishy. I looked down to lock eyes with a homeless man who had broken in and passed out.
That’s what it was like being a landlord.
And sure, that rental was in a lower-income neighborhood. But even the rentals I owned in middle- and upper-income neighborhoods caused me huge headaches, such as constant hassles with contractors, renters, and city inspectors. I hired property managers, but they were just as much work to manage. Like everyone else in the industry, they had an excuse every time they failed to do what they said they would do.
Labor Required
Active investing is, well, active. It’s a business, whether a part-time side hustle or a full-time enterprise.
That labor is split into two broad categories: the labor and skill required to acquire new properties and that required to manage them once owned. Underestimating the labor is one of the many mistakes made by novice cash flow investors.
You can outsource some of that labor, but it takes huge bites out of your returns. For example, you can buy turnkey properties, but you won’t get a discount. You’ll pay full price and earn mediocre cash flow at best.
Scoring great deals on properties requires a marketing engine to find off-market properties. Read: work and skill.
So yeah, those professional landlords who own dozens or hundreds of properties? They actually do make money—but they’re a small minority of landlords, running a full-time business. They buy off-market properties at deep discounts, finance them with a network of lenders they’ve cultivated, renovate them with a team of contractors they’ve trained, refinance them, and fill them with uncommonly professional property managers.
I know because my co-investing club invests alongside those operators as a silent partner.
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How I Invest for Cash Flow Instead
In 2018, I unloaded all my rental properties. Today, I own a smaller interest in over 5,000 units (plus dozens of other real estate investments not measured in “units”).
In some cases, that means equity ownership through joint venture partnerships. In others, it’s equity ownership through syndications. For these equity investments, I enjoy the full tax benefits, cash flow, and appreciation that direct owners get.
I’ve also lent at fixed-interest private notes between 10% and 15%, secured by real property at a low LTV. These notes don’t come with any tax benefits, but the high yield sure is nice.
If you’re looking for passive income, check out these seven income investments paying 8%+ yield every year.
“But Brian, don’t passive investments require $50,000 – $100,000 as a minimum investment, and aren’t they higher risk?”
For a lower minimum investment, join a co-investing club. In mine, members meet online every month to vet a new investment and can invest $2,500 or more in the ones they like. That’s a lot less than the $50,000+ you’ll need for a down payment and closing costs for a rental property.
More Control Doesn’t Mean Lower Risk
As for risk, too many investors confuse risk with control.
Most novice real estate investors think that because they “control” a rental property, that reduces their risk. I can tell you firsthand: It doesn’t.
I was 24 when I bought my first rental property and didn’t know what I was doing. Sure, I technically had the final say over decisions like tenant applications and when to sell the property. But I underestimated the labor and skill involved, made every mistake in the book, and lost massive amounts of money.
Today, I invest small amounts ($2,500+) at a time with expert operators who are better at asset management and property management than I ever was. I don’t have “control” over decisions like which type of loan to use or which tenants to lease to, and good riddance. I’ve outsourced that labor to professional operators.
Don’t fall into the mental trap of thinking that control over the asset means control over the returns. They are not the same thing.
I’ve built a “set it and forget it” real estate portfolio. Every quarter, my bank account floods with passive income. And someone else fields those phone calls about leaky roofs and delinquent tenants.
Not sure how to vet operators or find passive deals to invest in? Join a co-investing club for consistent deal flow and to vet operators together alongside 50 other investors while putting small amounts in the deals you like.
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Episode Summary
House hacking is the strategy where you buy a property, live in part of it, and rent out the rest so your tenants help cover your mortgage. Kevin and I have never done it. We have recommended it to our three kids for years, and two out of three have already passed. The third is not looking promising either. So when a 23 year old listener in Wisconsin asked us to cover it, we figured we would stop pitching our own kids and talk to all of you instead.
Here is what makes it work, and it is not the rent. It is the loan. Buying as an owner occupant puts you on completely different terms than buying as an investor, on the same building, on the same street. I explain what that actually buys you, along with the promise you make in writing when you take that loan, and why getting creative with it is a genuinely bad idea.
Kevin then ranks the property types by privacy rather than by cash flow, from a fourplex all the way down to renting bedrooms inside your own home. His rule of thumb is the opposite of what your spreadsheet will tell you, and it comes from watching people white knuckle a living situation to save a few hundred dollars a month. It is also, as it turns out, the exact reason our own kids said no.
Then I take financing, and I open by telling you what I am deliberately not going to give you. No percentages, no loan limits, no program rules, because those change and a wrong number in your head is worse than no number at all. What you get instead is the landscape, the one question that tells you whether a lender has ever closed a deal like yours, and the short list of questions to bring to every lender you interview. Kevin follows with the version of the numbers most new investors never run, why reserves are not optional, and what the rent on the first of the month is actually for.
From there we get into the unglamorous parts that decide whether this works. The inspection people skip and regret, plus one Kevin insists on. What separates a legal second unit from an expensive problem. Zoning, rental licensing, HOAs, insurance, and fair housing. Screening when you share a wall, including the story I have been collecting from an afternoon of court TV. Renting to friends. And how to live twenty feet from a tenant without being on call in your own driveway.
By the end you will know whether house hacking fits how you actually want to live, and what to line up before you ever make an offer.
What You’ll Learn in This Episode
Your three exit paths in year two, and the tax conversation to have before you buy
What house hacking is, and the four versions of it people rarely think about
Why owner occupied financing, not rent, is the real engine of the strategy
The occupancy promise you make in writing to a lender
How to rank property types by privacy instead of cash flow
Our rule of thumb, and the reason our own kids turned it down
Why we will not quote you down payment percentages or loan limits
The three families of loans that finance owner occupants
The one question that qualifies a lender for this kind of deal
The exact questions to bring to every lender you interview
Why pre-approved and pre-qualified are not the same thing at offer time
How to run the numbers twice, and which version tells the truth
What reserves are really protecting, and why the rent is not your money
The inspection people skip and regret, plus the sewer and pest issues specific to multifamily
Why exterior stairs and walkways are a life safety item
Why permits are the only documentation that counts on a converted unit
What separate metering changes about your leases and expenses
The mold inspection question, and when it is worth paying for
How AI can find the rental clauses buried in a 30 page HOA document
Why a standard homeowners policy may not respond once you have a tenant
The narrow fair housing exemption, and why we tell you not to lean on it
Why screening matters more, not less, when you live on the property
Individual leases versus joint leases when you rent bedrooms
The house rules to put in writing while everybody is still friendly
The systems that keep maintenance out of your driveway and rent out of a cash app
Key Takeaways
1. House Hacking Works Because of the Loan, Not the Rent
An investor buying a straight rental faces a much larger down payment, a higher interest rate, and a bigger reserve requirement. An owner occupant buying that exact same building gets primary residence terms. Same building, same tenants, same street. The only difference is that you are sleeping there. That is why whatever you have saved goes further with this strategy, and why it can put more units under your name earlier than a traditional purchase ever would. The trade is that you actually have to live there. Owner occupied programs require you to move in within a set window and stay a minimum period, and that is a representation you make in writing to a lender. Mortgage occupancy fraud is not a slap on the wrist.
2. Pick the Highest Privacy Option You Can Afford, Not the Highest Income Option You Can Tolerate
A triplex or fourplex gives you the most separation and the most income streams, but those buildings are harder to find, harder to finance, and often older. A duplex is the sweet spot for most first timers. A single family home with an ADU or a converted basement is a good middle ground that is easier to sell later. Renting bedrooms inside your own home produces the most income relative to purchase price and the least peace. The strategy only works if you actually stay, and the person who bails at month seven did not house hack. They just moved twice.
3. Interview Lenders, and Ask One Very Specific Question
Talk to at least three. Include a local credit union or community bank, a mortgage broker who can shop multiple lenders, and one lender your agent has actually closed a multifamily deal with. Then ask each of them how many owner occupied two to four unit purchases they have personally closed in the last year. Not how many mortgages. How many of these. This is a specialty, and a loan officer who writes single family loans all day can miss a requirement that kills your deal after you are already in contract. Referrals matter more here than rate shopping does. And get fully pre-approved, not pre-qualified, before you make an offer.
4. Run the Numbers Twice, Because You Will Not Live There Forever
The house hack version always looks great, because you are comparing the payment to rent and almost anything beats rent. The version that matters is the day you move out and every unit is rented at market. Subtract vacancy, maintenance, capital expenditures, and property management, even if you plan to self manage, because that line tells you whether the deal survives if you ever have to hand it off. Use real quotes for taxes and insurance, since both typically reset when a property changes hands. If that second version still works, you have an investment. If it only survives because you are living there for free, you have a discount on your own housing, and you need to call it what it is.
5. Proximity Is What Breaks a House Hack, Not Money
When you live twenty feet away, the natural friction that protects an off site landlord disappears. Now it is a knock on the door at nine on a Sunday about a dripping faucet. The fix is systems, not attitude. Put maintenance requests through a portal or a dedicated email, define out loud what counts as a true emergency, collect rent electronically so the system charges the late fee instead of you, and spend a little on separate mailboxes, solid locks, labeled storage, and assigned parking. Be friendly, responsive, fair, and a good neighbor. You are still their landlord, not their buddy.
Links & References Mentioned in This Episode
Episode 11: Inheriting Tenants with Your New Rental Property? Here’s What You Need to Know — named on air, because you inherit those leases exactly as they are written
Episode 20: The Nuts and Bolts of Residential Rental Property Insurance — the start of our two part series on property insurance
Episode 28: The Cash Reserves Blueprint: Protecting & Expanding Your Portfolio — the reserves conversation in full
Episode 32: Our Lease and Addendum Breakdown — the start of our three part lease masterclass
Episode 51: The Hidden Dangers of Using Cash Apps to Collect Rent — why rent does not go through a payment app
Episode 61: Emotional Support Animals — how verification is supposed to work
Episode 63: Owning a Rental in an HOA — what to read before you buy in an association
Episode 75: The Due Diligence and Inspections We Complete Before Buying a Rental Property — the inspections we pay for every time
Episode 83: Fair Housing for Criminal Background Checks — objective screening, applied the same way every time
Episode 128: AI Is Your New Business Partner — including the HOA document trick Kevin mentions here
DoorLoop: The landlord management software we recommend for larger portfolios
TurboTenant: Great landlord management software for newer landlords
Avail: Free Landlord Software
Innago: Free landlord software with online rent collection and screening
EZ Landlord Forms: State-specific lease documents, notices, and addendums
Connect with Us:
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👆Click this LINK to select from our FREE Landlord Forms and Doc’s
🤳Text Us SMS text to 650-489-4447. We love questions and love letters, hate mail not so much!
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Episode Summary
Garbage disposals in rentals cost about a hundred dollars, and I have watched that hundred dollar appliance turn into a cabinet replacement. Nobody requires you to install one. So why do we have them in every single unit we own?
Kevin opens with the distinction that decides your response time. A disposal is an amenity. It is not part of the warranty of habitability, and nothing about a working kitchen requires one. But it is wired into your drain line, and there is one specific moment when it stops being an amenity and becomes something else entirely. That moment changes whether this is a Monday problem or a tonight problem, and it ties right back to a conversation we had a few episodes ago.
Then Kevin argues the other side. He gives five reasons landlords skip disposals, and they are not cheap for doing it. One is the service call math. One is a slow, quiet failure that almost nobody catches in time. Two are about the building itself, and if you own an older multifamily or anything on a septic system, you need to hear those before you install another unit. The fifth reason is the honest one, and it is about knowing your own tenant profile. Because garbage disposals in rentals are not a one size decision, and the right answer for our units is not automatically the right answer for yours.
Then I take the part I actually care about, which is the system. We have disposals everywhere and almost no calls about them, and it has nothing to do with what we buy. It is lease language, a unit binder, a short video Kevin recorded, a walkthrough at move in, and one small item taped inside a cabinet door that costs almost nothing and stops more phone calls than everything else combined. Since we put this in place, our replacement rate dropped seventy five percent! I walk you through that math, what a replacement actually costs us, and the buying trick that saves fifty dollars every time.
Kevin closes with what your tenants need to know, because none of this works if the information you hand over is wrong. The “do not put down the disposal” list, and why the first item on it is the worst. Why cold water and not hot. The habit I push on tenants that keeps grease out of the drain entirely. And the one product to tell them never to pour down there.
By the end you will know whether garbage disposals in rentals make sense for your property, and if they do, exactly how to hand one over so it stops generating phone calls.
What You’ll Learn in This Episode
– Why a garbage disposal is an amenity and not a habitability item
– The exact moment a dead disposal becomes an urgent problem
– Why built-in appliances are treated differently than the ones you can carry out
– Where wear and tear ends and tenant damage begins
– Five reasons some landlords will not install a disposal at all
– The slow failure that turns a hundred dollar part into a cabinet replacement
– Why shared drain stacks in older multifamily change the answer
– What a disposal does to a septic system over time
– How tenant profile should factor into the decision
– The compromise for landlords who skip the disposal entirely
– What to check in your lease before removing one mid-tenancy, and the clause to delete after
– The four part system we use, and what it costs to copy
– Why the use and care language belongs in an addendum, not buried in the lease
– The small item we tape inside the sink cabinet door, and where it goes on your inspection checklist
– The shop towel trick our contractor uses to catch a leak before it does damage
– The sticker and QR code idea we are adding to every unit
– How we cut replacements by seventy five percent, with the math
– What a replacement costs us and the fifty dollar buying trick
– The horsepower rule for rental grade units
– The complete do not put this down here list
– Why cold water matters more than people think
– The paper towel habit that keeps grease out of your drain lines
– The one product to tell every tenant never to use
– Why a disposal will not raise your rent but still helps you
Key Takeaways
1. Garbage Disposals in Rentals Are an Amenity Until the Sink Stops Draining
This is the framing that matters. A disposal is not part of the warranty of habitability, and nothing about a functioning kitchen requires one. But it is bolted under the sink and wired into the drain line. So, if the disposal dies and the sink still drains fine, that is a routine repair on your normal schedule. If the disposal dies and now there is standing water in that sink, you are not dealing with an amenity anymore. You are dealing with plumbing, and plumbing is very much a habitability item. Same appliance, two completely different response clocks.
2. The Real Cost Is Water Damage, Not the Appliance
These units rust through at the seams as they age, and when they go they do not explode. They weep. They drip into the sink base cabinet for weeks while your tenant stacks cleaning supplies on top and never looks down. By the time you hear about it you have a swollen cabinet floor, maybe mold, sometimes the subfloor underneath. That is why we open the cabinet and look at every inspection and every turnover. Jim does one better. He lays a blue shop towel under the drainpipe and the disposal, and on the next inspection the water marks and wrinkles tell him there is an intrusion problem long before anyone would notice it otherwise. We are hunting the slow drip before it becomes the expensive one.
3. Your Building and Your Tenant Profile Change the Answer
Older multifamily where units share a drain stack means one tenant’s habits back up into a neighbor’s kitchen. Septic systems take on more solids than they were designed for, which means more frequent pumping and a shorter life on the whole system. And if you run Class C or D rentals, the level of hand holding is different. Not worse, just different. If your honest read is that a disposal gets abused no matter what you do, skipping it is a business decision, not a failure. A heavy duty sink strainer is the compromise, and there is no motor to burn out.
4. The System Matters More Than the Brand
We have specific use and care language in the lease, instructions in the unit binder, and a short video Kevin recorded showing exactly how to hit the reset button and clear a jam. When a tenant texts that the disposal is broken, our first move is not to call our handyman. It is to send that video. Nine times out of ten they fix it themselves, because most of the time it is not broken at all. It tripped the overload, or something is wedged against the impeller. Both are a two-minute fix if somebody shows you where to press and where to crank.
5. Seventy Five Percent Fewer Replacements, and Here Is the Math
Before this system we were replacing about one disposal per year. Since we added the use and care instructions, the binder, and the video, we have replaced exactly one in four years. At the old rate we would have expected four over that stretch. We did one. That is a seventy-five percent reduction, and it does not even count the service calls that never happened because the tenant fixed it themselves after watching the video. Those never became a line item at all.
Links & References Mentioned in This Episode
Episode 59: Determining Wear and Tear Vs. Damage to Your Rental Property — how to handle it when you find damage, named on air
Episode 137: Emergency Maintenance vs Routine Repairs — the urgent versus routine framework we use here
Episode 96: Tips From Our Contractor — everything Jim has taught us over the years
Episode 142: Best Time to Renovate a Rental — why turnover is the window for work like this
Kevin’s Disposal Reset & Jam Video — the exact video we send to tenants and put in every unit binder
InSinkErator Badger 5 — the unit we keep on the shelf, Amazon affiliate link
Disposal Hex Wrench — the backup wrench we keep on hand taped in every unit.
DoorLoop: The landlord management software we recommend for larger portfolios
TurboTenant: Great landlord management software for newer landlords
Avail: Free Landlord Software
EZ Landlord Forms: State-specific lease documents, notices, and addendums
Connect with Us:
🌎 Visit our website
📧 Subscribe to our newsletter.
👆Click this LINK to select from our FREE Landlord Forms and Doc’s
🤳Text Us SMS text to 650-489-4447. We love questions and love letters, hate mail not so much!
📩Email us at: Stacie@YourLandlordResource.com, Kevin@YourLandlordResource.com
✔️Course Waitlist: From Marketing to Move In, Place Your Ideal Tenant
📱 Follow us on Instagram, Facebook, & join our private Facebook group
🎧 Listen & Subscribe on Apple Podcasts, Spotify, or your favorite podcast app
Affiliate Disclosure: This episode may contain affiliate links. Your Landlord Resource may earn a commission if you purchase through our links, at no additional cost to you. We only recommend products and services we believe in.
Legal Disclaimer: Nothing in this episode constitutes personalized legal or financial advice. Always consult a licensed real estate attorney or CPA for guidance specific to your state, city, and situation.
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The best time to renovate a rental is almost never the moment you finally get sick of looking at the kitchen. You can pick the perfect flooring, get a fair bid, and hire a great contractor to install it, and still lose money on the whole thing. Not because the work was wrong. Because the timing was.
Kevin opens with the framing that clears up half the confusion on this topic. There are only two categories of rental renovation, and landlords get themselves in trouble by applying the rules of one to the other. Once you know which bucket you are standing in, most of the hard decisions get a lot easier.
From there he makes the case for the window we use almost every time, and he backs it with three reasons that stack on top of each other. One of them is a cost most landlords never think to count. Then I take the calendar side of it, because rental markets are seasonal, and the best time to renovate a rental usually sits right inside your slowest months. I also get into why your own leasing history beats any general rule you will read online about the best time to renovate a rental, including ours.
Then there is the part where you do not get a choice. We had a bathroom flood in Chico, and there is no version of that where I sit down with a seasonality chart. That leads into the livability conversation, and one question I flag rather than answer, because I truly cannot answer it for you. What I can give you is the phone call to make before you ever need it.
Kevin also tells you about the Idaho unit, where we learned that the best time to renovate a rental and the right reason to renovate one are two separate questions. Three weeks of work, most of it the two of us on our hands and knees, and we did not get enough of a rent bump to justify any of it. We would still do it again, and the reason is worth hearing before you spend a dollar on your own place. Plus the three week vacation that became the best renovation window we have ever had, what actually fits into a one week versus an eight week timeline, and the appliance we refuse to buy anymore.
By the end you will know how to pick the best time to renovate a rental you own, and whether your next project is a business decision or a preference. Both are allowed. You just need to know which one you are making.
What You’ll Learn in This Episode
- Why the best time to renovate a rental is almost never the day you decide to
- The two categories of rental renovation, and why mixing them up costs you money
- Why tenant turnover is the single best renovation window, in three stacking reasons
- The cost of working around a tenant that never shows up on a bid
- How the off-peak season play turns weak vacancy days into free renovation time
- How to pull your own leasing history and find your real peak season
- What basic livability rules mean in the middle of a renovation
- The hotel question nobody can answer for you, and the two things to do about it
- The one insurance call to make long before a repair ever displaces a tenant
- What actually fits into a one, two, four, and eight week timeline
- How to calculate the ceiling on what any renovation can earn you back
- When to DIY, when to hire out, and the jobs you should never touch
- The appliance we stopped providing entirely, and the reason why
- What to know about smart devices before you install a single one
Key Takeaways
1. The Best Time to Renovate a Rental Is During Turnover
If you take one thing from this episode, take that. An empty unit is dramatically cheaper to work in, because a crew can drop their tools, spread out, and leave the mess overnight. In an occupied unit, every single day ends in pack up and clean up, and you are paying for all of it. Turnover work is also close to free vacancy, since you were going to have the unit empty anyway. If your standard turn is one week and the renovation takes three, you did not lose three weeks of rent. You lost two. That is the number that belongs in your spreadsheet.
2. Your Own Leasing History Beats Any General Rule
Everyone will tell you the best time to renovate a rental is the slow season. Fine, but which months are slow where you own? Go pull three to five years of your own leasing history and look at when applications spiked and when units sat. That is your peak season. Everything else is your renovation window. Because a general rule falls apart fast in a snow market, a college town, or the desert in August.
3. Some Repairs Are Not a Decision at All
Nearly everywhere in this country there is some version of a rule that says a rental has to be livable. Working plumbing, running water, a functioning toilet and shower, heat, working electrical. So if a repair takes the only bathroom in the unit out of service for any real stretch of time, you have moved past inconveniencing somebody. Whether you owe that tenant a hotel depends entirely on where your property sits, and that is a question to answer before you need it, not during.
4. The Best Time to Renovate a Rental Still Has to Pencil Out
Look at what the top of your local market is actually renting for right now, not what you hope it rents for, and compare it to what your unit rents for today. The gap between those two numbers is the ceiling on what a renovation can earn you, and you will never capture all of it. If that gap is a hundred dollars a month and the project costs twenty thousand, you are looking at more than sixteen years to break even on rent alone. That does not mean do not do it. It means do it for the right reason.
5. DIY Saves Labor and Costs You Time
Who swings the hammer changes the best time to renovate a rental, because it changes how long the unit sits. If a crew would take one week and you would take three, ask what two extra weeks of vacancy costs on that unit. On a four thousand dollar a month rental, that is two thousand dollars. If hiring it out costs less than the difference, you are not saving money by doing it yourself. You are paying for the privilege, which is allowed as long as you know that is what you are doing. And there is a short list you should never touch regardless of skill, starting with anything that needs a permit.
Links & References Mentioned in This Episode
Episode 91: We Renovated 2 Out-of-State Units, Would We Do It Again? — the full Idaho story
Episode 117: Why We Installed Smart Locks (And Would Do It Again) — before you add any smart device
Episode 96: Tips From Our Contractor — everything Jim has taught us over the years
Episode 139: Landlord DIY vs Hire Out — the four-question filter for what to handle yourself
Episode 137: Emergency Maintenance vs Routine Repairs — what is urgent and what can wait
ENERGY STAR Rebate Finder — enter your zip code to find local utility rebates before you price a bigger efficiency upgrade
DoorLoop: The landlord management software we recommend for larger portfolios
TurboTenant: Great landlord management software for newer landlords
Avail: Free Landlord Software
EZ Landlord Forms: State-specific lease documents, notices, and addendums
Connect with Us:
🌎 Visit our website
📧 Subscribe to our newsletter.
👆Click this LINK to select from our FREE Landlord Forms and Doc’s
🤳Text Us SMS text to 650-489-4447. We love questions and love letters, hate mail not so much!
📩Email us at: Stacie@YourLandlordResource.com, Kevin@YourLandlordResource.com
✔️Course Waitlist: From Marketing to Move In, Place Your Ideal Tenant
📱 Follow us on Instagram, Facebook, & join our private Facebook group
🎧 Listen & Subscribe on Apple Podcasts, Spotify, or your favorite podcast app
Affiliate Disclosure: This episode may contain affiliate links. Your Landlord Resource may earn a commission if you purchase through our links, at no additional cost to you. We only recommend products and services we believe in.
Legal Disclaimer: Nothing in this episode constitutes personalized legal or financial advice. Always consult a licensed real estate attorney or CPA for guidance specific to your state, city, and situation.
Listen On:
Rental appliance repairs are one of those decisions you never actually make. You just get ambushed by it. The refrigerator quits at nine o’clock on a Friday night. The dishwasher waters the floor instead of the dishes. The washer starts walking across the laundry room like it owes somebody money. And there you are, phone in hand, wondering what your policy actually is.
That was me with our very first rental. We inherited the original appliances from the previous owner. They were white, which was very early 2000s, and they were cheap, but they did the job. Right up until the refrigerator didn’t. I freaked out a little, because I could not tell you whether that was our problem or the tenant’s, and I honestly did not know what our lease said about it either.
Here is what I wish somebody had told me sooner. You have more than one option. Landlords handle appliances about five different ways, and most of us never look at four of them.
We start by breaking appliances into three tiers, because what tier something falls into changes everything that comes after. Then I get to the rule that hangs over the first two tiers, which is refreshingly simple and catches a surprising number of landlords off guard. Kevin follows with the legal piece, kept deliberately short, because your answer depends entirely on where your rental sits and not on what works for us in California. He gives you a twenty-minute homework assignment that will settle it for your own market.
Then Kevin gets into tenant-provided appliances, which is the option people ask us about the most and handle the worst. There are four things to put in writing before that appliance comes through the door, and the third one is the one nobody thinks of until two in the morning when it becomes very expensive.
I come back with the line that decides most repair calls, which is normal wear and tear versus tenant misuse, and more importantly how you prove which one you are looking at. I read you the actual exceptions in our lease addendum. I also answer a follower who wrote in asking how to word an addendum for the washer and dryer she provides, including whether a short warranty window is worth offering.
Kevin closes with all five options laid out side by side, told honestly, including how each one fails. One of them looks like it saves you money and quietly costs you more. Another one only works on certain appliances and will not save you at all on the ones that matter.
By the end you will know which of the five you are actually running right now, which is more than most landlords can say.
What You’ll Learn in This Episode
- The three tiers of rental appliances, and why the tier decides the answer
- Why appliance decisions are a comps question, not a national one
- How every appliance is a marketing asset and a maintenance liability at the same time
- The one rule that hangs over your kitchen core and your expected extras
- Why a lease that is silent about appliances never works in your favor
- The implied warranty of habitability, in plain English
- A twenty-minute homework assignment that settles your state’s rule
- Why a lease clause pushing habitability repairs onto a tenant will not hold up
- The four things to put in writing before a tenant’s appliance comes through the door
- The tenant-supplied clause that turns a repair into a water damage claim
- How to prove tenant misuse instead of just deciding it was their fault
- The exceptions we spell out in our own lease addendum
- How to word an addendum for a washer and dryer you provide
- All five options for handling appliance repairs, and how each one fails
- Why the repair deductible can cost you more than it saves
- When to repair, when to replace, and the one time you ignore the math
Key Takeaways
1. Rental Appliance Repairs Start With One Simple Rule
If you provided it, you maintain it. That covers the stove, oven, and refrigerator, and it covers the dishwasher, built-in microwave, and garbage disposal too. If it was sitting in that kitchen when your tenant walked through on move-in day, it is part of what they agreed to rent. It got priced into the rent whether you thought about it that way or not. So when it dies of old age, that is your bill.
2. A Silent Lease Is Not a Win
The mistake we see most often is a lease that says nothing about appliances at all, and a landlord who assumes silence means it is the tenant’s problem. Silence almost never works in your favor. When your lease does not take a position, the default fills the gap, and the default is that whatever you handed over working, you keep working. Therefore, if you want a different arrangement, you have to write it down. And it has to be legal where your property sits.
3. What You Include Is a Comps Question
I cannot give you a national statistic on what percentage of rentals include a washer and dryer, and I am not going to make one up. But you do not need a national number, because this is a local decision. Pull ten active listings in your neighborhood, at your price point, in your property type. Whatever eight of them are doing is your market standard. Furthermore, remember that every appliance you add is both a marketing asset and a maintenance liability, so decide on purpose rather than by accident.
4. Tenant-Provided Appliances Need Four Clauses, Not One
Most landlords write down the easy one, which is that repairs are the tenant’s problem. Then they stop. You actually need four. Ownership, so it is clear the appliance belongs to the tenant. Repairs, which is the obvious one. Damage the appliance causes, because a washer hose that lets go at two in the morning is not an appliance repair anymore, it is a water damage claim, and this is why renters insurance matters so much here. And move-out, because otherwise that appliance gets abandoned in your garage and becomes your disposal problem.
5. Wear and Tear Is Yours, Misuse Is Theirs, But You Have to Prove It
A compressor that dies at year twelve is a lifespan problem, not a tenant problem. Misuse, abuse, and neglect are a different story. However, you do not get to decide it was their fault simply because you do not want the bill. Your evidence is your repair tech, who can tell you flat out whether that drum failed on its own or whether the washer has been loaded like a clown car for two years. Get it in writing on the invoice, because that is what makes this a conversation instead of a fight.
6. There Are Five Options, and Each One Fails Differently
You can supply and cover everything, which is the most common approach and what we do. You can use an as-is clause, which genuinely works on non-essentials and will not save you at all on a stove or refrigerator where those are habitability items. You can use a repair deductible, which stops the light bulb calls and also stops the calls you actually want. You can charge an appliance amenity fee, provided that is permitted where you operate. Or you can go tenant-supplied, which costs you the least and narrows your applicant pool the most. Most importantly, pick one on purpose and write it into your lease.
Links & References Mentioned in This Episode
Episode 128: AI Is Your New Business Partner, how to use AI to search your own lease
Episode 131: Landlord vs Tenant Maintenance Responsibilities, who handles what
Episode 137: Emergency Maintenance vs Routine Repairs, what is urgent and what can wait
CPSC Recall List: The federal recall database, worth checking against your appliance model numbers
EZ Landlord Forms: State-specific lease documents, notices, and addendums
TurboTenant: Great landlord management software for newer landlords
DoorLoop: The landlord management software we recommend for larger portfolios
Connect with Us:
🌎 Visit our website
📧 Subscribe to our newsletter.
👆Click this LINK to select from our FREE Landlord Forms and Doc’s
🤳Text Us SMS text to 650-489-4447. We love questions and love letters, hate mail not so much!
📩Email us at: Stacie@YourLandlordResource.com, Kevin@YourLandlordResource.com
✔️Course Waitlist: From Marketing to Move In, Place Your Ideal Tenant
📱 Follow us on Instagram, Facebook, & join our private Facebook group
🎧 Listen & Subscribe on Apple Podcasts, Spotify, or your favorite podcast app
Affiliate Disclosure: This episode may contain affiliate links. Your Landlord Resource may earn a commission if you purchase through our links, at no additional cost to you. We only recommend products and services we believe in.
Legal Disclaimer: Nothing in this episode constitutes personalized legal or financial advice. Always consult a licensed real estate attorney or CPA for guidance specific to your state, city, and situation.
Listen On:
If you’ve ever felt like filling a rental vacancy is chaos — a flood of messages, no-show showings, applications missing half their paperwork — this episode is your landlord vacancy checklist. We break down the exact process we follow every time, from the moment we place the ad to the moment someone walks through the door, plus one bonus step that happens after.
Key Takeaways
• A clear, detailed ad lets prospects pre-qualify themselves before they ever contact you — saving everyone time.
• Photos are communication, not decoration. Well-lit photos of every room set honest expectations.
• Prescreening comes before every application or showing, with the same questions asked in the same order, every time — that consistency is what protects you.
• Income and credit standards should be set once and applied evenly to every applicant. Fair, consistent, and documented is the whole game.
• Move conversations off the listing app and onto text or email once you’re ready to schedule a showing.
• Scheduling showings back to back creates natural urgency, and a first-come, first-qualified policy keeps things fair.
• A one-hour confirmation text before every showing all but eliminates no-shows.
• A simple, unrushed walkthrough lets the property sell itself.
• A property information flyer sends prospects home with everything they need to remember and apply.
• A 24-hour follow-up text after the showing tells you quickly who’s actually interested.
Want the full system, including every script and template? Get on the waitlist for From Marketing to Move In at https://yourlandlordresource.com/m2mwaitlist/
Links & References Mentioned in This Episode
Episode 124: Shop Talk — The Importance of Rental Property Photos
Join the waitlist for From Marketing to Move In
Connect with Us:
🌎 Visit our website
📧 Subscribe to our newsletter.
👆Click this LINK to select from our FREE Landlord Forms and Doc’s
🤳Text Us SMS text to 650-489-4447. We love questions and love letters, hate mail not so much!
📩Email us at: Stacie@YourLandlordResource.com, Kevin@YourLandlordResource.com
✔️Course Waitlist: From Marketing to Move In, Place Your Ideal Tenant
📱 Follow us on Instagram, Facebook, & join our private Facebook group
🎧 Listen & Subscribe on Apple Podcasts, Spotify, or your favorite podcast app
Affiliate Disclosure: This episode may contain affiliate links. Your Landlord Resource may earn a commission if you purchase through our links, at no additional cost to you. We only recommend products and services we believe in.
Legal Disclaimer: Nothing in this episode constitutes personalized legal or financial advice. Always consult a licensed real estate attorney or CPA for guidance specific to your state, city, and situation.