By John Triplett
A new survey says renters want flexible monthly payment plans, loyalty programs and help with the stress of moving.
The RealPage survey of more than 2,000 renters showed:
- 98% of renters want a loyalty program for paying rent.
- 93% of renters are interested in flexible rent payments.
- 97% of renters would choose an apartment offering an easy way to manage moving.
The 2024 National Multifamily Renter Study shows the multifamily housing industry must adapt and enhance its offerings to attract and retain residents amid the changing rental landscape and increase in supply, RealPage said in a release.
- 97% say they would be more likely to renew their lease if working with their property manager was as easy as interacting with Amazon.
- 97% would be more likely to choose an apartment offering a service to simplify moving, such as help setting up internet and utilities, finding a local mover and setting up payments.
- 93% were interested in flexible rent payment schedules (biweekly, bimonthly, weekly) rather than a full, once-a-month payment.
“It’s a renter’s market, and they demand more from moving assistance, loyalty programs and payment options to enhance their living experience,” Rob Franklin, Senior Vice President and General Manager of Resident Solutions at RealPage, said in a release. “This national survey confirms the modern experience renters want today, and we are thrilled to bring it to them with LOFT™, RealPage’s fully integrated resident experience platform.”
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Overall, the survey responses showed that enhanced offerings from a property manager, such as a seamless digital app and loyalty programs, factor heavily into a resident’s decision to select an apartment and renew. Research shows 97% of respondents would choose a specific unit and renew their lease if they were offered improved benefits from property management companies.
The study, conducted by Dimensional Research, was presented during RealWorld 2024, the company’s conference that brings together nearly 1,500 registered attendees from the multifamily community to highlight innovations in the rental housing industry. All 2,011 qualified study participants were currently paying rent for an apartment in a multi-unit building operated by a property management company. All were between 18 and 55 years of age living in the United States. A mix of genders, household incomes, regions and demographics were captured to enable analysis by various categories.
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By Krista Reuther
When a tenant approaches you about breaking the lease agreement, before jumping to conclusions, it’s important to understand there are many situations out of their or your control. Being sympathetic, listening to your tenant, and staying mindful of different circumstances will help you understand how you should move forward. While you need to always check local and state landlord-tenant laws, here are five reasons tenants might want to break a lease:
1: Active Military Duty
Active military duty is one of the few times when a tenant is able to legally break a lease without penalty. Active duty military members are covered by the Servicemembers Civil Relief Act, which means a military service member who receives orders to be deployed or to move is allowed to break a lease. It’s important to note, the tenant still needs to follow the proper course of action. Should a service member receive a change of station order during the course of their lease that requires them to relocate for a period of at least 90 days, they must notify the landlord in writing no less than 30 days prior to vacating the rental unit. They also need to provide the landlord with proof they have been relocated, such as a copy of the change of station orders or military deployment.
2: The Tenant Unexpectedly Becomes Unemployed
Job circumstances can change unexpectedly and suddenly. Your tenant might have had a stable job and proof of pay stubs when they signed the lease, but down the road, loses their job. Unless there is a provision in the lease that allows a tenant to break a lease due to financial hardship, the tenant is still responsible for paying rent in a timely manner per the lease agreement. Having a clause related to financial hardship was atypical in the past, but the last year and a half could prompt landlords to include one. Some jurisdictions might require landlords to work with tenants in this situation.
If the lease does not include a clause regarding financial hardship, renters should contact the landlord to inquire about alternative options, such as adding a cosigner or negotiating rent. Remember to be sympathetic and communicate with your tenant to come up with a solution that works for both of you.
3: Job Transfer
A sudden job transfer is a common reason why tenants may wish to break a lease. Should this happen, the landlord is not obligated to release the tenant from their rental agreement. Landlords should explain to the tenant they must pay the remainder of the lease; a solution for this particular reason could be to allow the tenant to sublet which we’ll explain below.
4: The Tenant Has Found Another Home
A tenant may come to you and tell you they found a different rental unit to live in, or that they purchased a home and, as a result, need to break the lease. In this case, the landlord is under no obligation to agree to let the tenant out of their rental unit without penalty, especially if it violates the lease agreement and there are no other protections in place.
5: Environmental Factors
Tenants might want to break a lease based on additional environmental factors. The biggest example of this is domestic violence – the majority of states allow victims of domestic violence to break the lease agreement without penalty by providing landlords with written notice; double-check your state’s landlord-tenant laws to see what protections are in place for domestic violence victims.
Another environmental factor tenants might want to break the lease because of is an unlivable condition in the rental unit. If landlords have failed to keep the implied warranty of habitability to provide a safe and livable rental unit, tenants may have grounds to break a lease agreement. Once again, always check your landlord-tenant laws, or consult with an attorney to make sure you are staying compliant.
How to Protect Yourself in the Lease Agreement
The biggest thing landlords can do to protect themselves when a tenant wants to break a lease is putting the right clauses in the lease agreement itself. Since a lease agreement is a legally binding contract, it’s essential to always review the lease agreement with your tenant so they understand their responsibilities as well as yours as the landlord. Here are some things to include in your lease to help protect yourself when a tenant wants to break the agreement:
- Subleasing Clause: If you choose to include a subletting clause in the lease agreement, this can be a great alternative for renters who need to move away suddenly or cannot afford rent anymore. It can be a convenient solution for landlords as the previous tenant will find a replacement renter, and you can sign a new lease with a new renter. Remember to always screen subletters as well to protect your rental investment.
- Lease Buyout Fee: A landlord can protect their own interests by including a lease buyout fee in the lease agreement. This requires a tenant to give a 60-day written notice and also pay an additional amount equal to two months’ rent. The money is usually due upon notice, and the 60 day period begins when the fee has been paid and an exact move-out date has been provided.
- Forfeit Security Deposit: Another option landlords can include in the lease agreement is that if a tenant wants to break a lease, they forfeit the security deposit. This can be in addition to the buyout fee or any other legally allowed consequences.
Read here to learn what else should be included in a standard lease agreement. To customize a lease agreement, build your own state-specific lease in your TurboTenant account.
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How to Prevent a Tenant from Breaking the Lease
As we mentioned above, sometimes there are circumstances out of your control or legal obligations you have to follow when a tenant wants to break a lease. However, there are a few things you can do to help prevent tenants from wanting to break a lease in the first place. The most important and obvious thing to do is screen all potential tenants. While a screening report will give you a criminal background check, credit check, and eviction history report, landlords should also talk to the tenant and get to know them better.
Ultimately, landlords need to review all of the lease terms, clauses, and additional provisions before a tenant signs. Emphasizing both parties’ responsibilities will help everyone be on the same page.
If you have a tenant who wants to break a lease, remember to be understanding, communicative, and always consult the lease agreement, along with landlord-tenant law. Landlords should be prepared for this type of situation by knowing the legal reasons a tenant can break the lease and setting up the lease agreement properly. If you are looking to fill your vacancy or are expecting a tenant to break a lease, create your TurboTenant account today so you can streamline the process and fill your property in no time.
Tenants Breaking Lease Agreements FAQ
When a tenant needs to break a lease, do they need to give written notice?
Always check your local and state guidelines, but it might depend on the situation. In the example of an active service member, they are required to provide a 30-day written notice. Typically, when leases end, a tenant should also fill out a notice to vacate form.
Should I consult a lawyer when a tenant tries to break a lease?
It’s never a bad idea to consult with your lawyer to know your rights and understand what the correct actions are that you can take. Remember, each state and even individual city might have different laws when it comes to tenants breaking lease agreements.
How can I build protections against tenants breaking a lease into my rental agreement?
You can build protections into your lease agreement, like we mentioned above, by including things such as a buyout clause or subleasing clause. You can easily do this with our customizable and online lease agreements found right in your TurboTenant account. Our leases are state-specific and have been proofed by local landlords and lawyers to ensure you stay compliant.
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Provided by Steadily
Making mistakes with insurance coverages when buying investment properties can cost you big time. We won’t talk here about the really obvious ones like ‘‘not taking out enough insurance’,’ or ‘’not taking out separate flood insurance,’’ because you, one, most likely have already heard about these or two, are unlikely to have made those mistakes because you can’t even get your loan without mandatory home insurance coverage.
So, instead, let’s cover the other areas that investors tend to overlook. They can be less obvious and seem less important but trust us when we say that they can make your life miserable if you ignore them.
1. Not Upgrading to a Landlord’s Insurance Policy
This is easily the most common rookie mistake investors make at the beginning of their careers as landlords. It can seem that so long as the property is covered by homeowner’s insurance, it doesn’t really matter who lives at the property.
Actually, it does, so much so that you may lose your claims for damages caused to the property by your tenants or other problems that occur while your tenants are living at your property.
Landlord insurance is different from standard homeowner’s insurance, and it covers both the property itself and the homeowner’s liability. So, think of common scenarios like theft and break-ins, fires, plumbing damaged by a bad storm, and the loss of rent that can arise from your tenants having to move out after such an event.
Let’s imagine another scenario in which your tenant injures themselves while they’re on the premises. If you’re not covered by landlord insurance, you could be sued by the tenant and may have to cover their medical bills.
You have to learn to think like a landlord. While most investors realize that property maintenance is their responsibility, many don’t consider the other possibilities or the fact that your tenants, to a certain extent, are also your responsibility. Landlord insurance is the easiest way to keep peace of mind in case something does happen.
Of course, landlord insurance only goes so far in terms of what it will cover. Landlord policies, like other insurance policies, come with deductibles, and coverage is typically limited to what are known as covered perils. Fire damage, burglaries, and bad weather are typically included on that list. On the other hand, your tenant damaging your furniture is not, a point we’ll elaborate on shortly.
A quick look at the declaration page of your insurance will tell you if you have standard homeowner’s or landlord’s insurance. You can also call your insurance agent to clarify and discuss switching to the right kind of insurance if necessary.
2. Not Understand the Limitations On Coverage
The second most common mistake investors make is assuming that landlord insurance will cover just about anything that happens at the rental property, including your tenant spilling red wine on a couch you put in your short-term rental.
This is a costly mistake as you most likely will end up having to clean/replace the couch yourself. As a general rule, damage to personal property by tenants is not covered by landlord insurance. Now, if the damage was caused by a covered peril, say, the couch burned down in a fire (that the tenant did not cause), then you will be able to claim for it.
This isn’t a cause for panic. If you own furnished short-term rentals, you can get personal property damage covered via AirCover and other platform-specific programs for short-term rentals. You’ll just have to purchase them separately from regular landlord insurance.
If you want to educate yourself further on what’s covered by landlord insurance and what isn’t, Steadily recently made a valuable video that breaks down some of the common landlord policy coverages that you need to know.
Bonus tip: We mentioned ‘‘loss of rent’’ in our first point, and let’s reiterate that the only loss of rent that landlord insurance will cover is the loss of rent related to a covered peril. So, a situation where a tenant has to move from a fire-damaged building qualifies. One where a tenant just stops paying you rent does not.
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3. Not Realizing Vacancy Clause Time Limits
Most landlord insurance policies include a vacancy clause. This clause will cover the landlord in case it is impacted by several commonly recognized ‘’perils’’ during vacancy. These include vandalism, theft and break-ins, water damage, and sprinkler leaks.
Many new landlords don’t realize that this vacancy clause has a time limit, typically 30 or 60 days. What that means is that once the property has been vacant longer than the time period specified in the policy agreement, you won’t be covered for any of the ‘‘perils’’ outlined above.
Many landlords who rent out their homes long-term may feel that they don’t need extra vacancy insurance because their rental never stands empty for longer than a couple of months. However, if you own a short-term vacation rental, you’re much more vulnerable to the time-sensitive nature of standard vacancy clauses. In that case, getting extra vacancy insurance is a very good idea. This applies to home flippers, too, as properties that are being renovated can easily be unoccupied for many months at a time.
It is always very important to disclose all of the specifics when taking out vacancy insurance because the coverage and the terms will vary depending on why you anticipate vacancy periods at your investment property. You also want an insurance product that will cover you for the right risks. Steadily, for example, has specific products for properties under renovation, fix-n-flips, and long-term vacant dwellings.
4. Not Including Insurance Costs in Deal Analysis
Last but not least, not factoring insurance into your deal analysis can cost you a lot. Depending on where your investment property is located, the costs can vary considerably, and you really can’t just ballpark-guess it. State-by-state premium fluctuations are significant. For example, if you live in Arizona, you may only pay $839 per year, but if you live in Florida, the annual landlord insurance cost will be closer to $1,722 per year. That’s a huge gap.
And geography isn’t everything here. The age of the property and even what type of roof it has can significantly alter the premiums. Obviously, any investor worth their salt needs to know in advance whether landlord insurance will set them back an extra $800 or $2-3k.
So, always factor landlord insurance premiums into your prospective investment analysis. Using a landlord insurance calculator or getting a property-specific quote is crucial for investors performing deal analyses on properties. And bear in mind that landlord insurance, because of all the extra coverage it offers, can cost 25% more than home insurance policies. If you’ve been budgeting for standard homeowner’s insurance up till now, you’ll have to revise all your figures.
Conclusion
Landlord insurance is essential for protecting your rental property against many common problems that can go hand-in-hand with having tenants. Insurance is always about calculating risk, and when someone lives at a property who isn’t the owner, that risk goes up. It’s not just because rentals often get damaged but because there are many logistical difficulties, such as when a rental property is damaged and a tenant has to move out, or when a rental stands empty for long periods of time.
Because of the higher risks, landlord insurance will cost you more as an investor than standard homeowner’s insurance would cost you as a homeowner. However, If you only take away one important point from this list of common mistakes with landlord insurance, it’s this: don’t choose not to take it out. Landlord insurance protects you against the most unexpected events at your rental, which are often the costliest. It could even save your entire business.
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