Managing Rental Properties: 26 Best Areas To Master

No day is exactly the same in property management. Between tenant management, market dynamics, and changing laws, property management companies have a constant set of things to keep tabs on.

We get it. As a company that works with property managers and owns rental properties ourselves, we understand the challenges you face on a daily basis. Even just last spring in 2023, the City of Phoenix passed laws around tenant source of income that greatly impacts how we go about our tenant screening process for our own rentals. Dealing with these ever-changing regulations is just one of the many challenges in the property management industry.

So, how do you keep tabs on everything? In this article, we cover A to Z areas for every property manager. Use it as a resource to help you explore the right areas for managing rental properties.

Rental property management compliance areas

From understanding local laws and setting screening policies to managing tenants, here’s our list of top legal considerations:

Abandoned property

When tenants vacate a rental unit but leave behind personal possessions, there are legal procedures rental property management teams must follow. These include rules around the removal, storage, or disposal of abandoned property.

Typically, state laws require rental management to provide a written notice to the tenants specifying the items left behind. Tenants then have a period of time to retrieve possessions before the landlord can sell, donate, or dispose of the property. Check your state’s specific statutes on how many days’ notice is required and what effort must be made to reach the tenant you sell or dispose of unclaimed property.

Application denial

Another tricky area for professional property managers. There are some dos and don’ts as it relates to prospective tenants and communicating application denial. In some cases, you’ll need to send an application denial letter per the Fair Credit Reporting Act (FCRA). Be sure to review local and state ordinances as well to confirm compliance with any additional tenant screening and application denial regulations that may be in place.

Application fees

Rental applicants commonly pay application fees when submitting information for tenant screening. Check your local and state laws to see if restrictions exist on how much you can charge prospective residents to apply.

Typical application fee amounts range from $25 to $60 per adult applicant. The fee helps cover your admin costs of performing background checks, income verification, and rental history reviews. RentZap’s application fee is $55.00 for our underwriting and legally compliant screening process.

Collecting rent

Obviously, getting paid on time is priority #1! Clear rental agreements can help you to avoid issues. If residents forget or fall behind on rent, use late notice procedures per your state’s rules. Be aware of the legal ins and outs if back rent piles up, and you may need to use the eviction process down the road.

Emotional support and service animals

Emotional support and service animals aren’t your typical pets, so you can’t slap on pet fees or require deposits. Just make sure your policies are in line with federal regulations to avoid legal headaches down the road.

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Eviction procedures

We know evicting residents is stressful and zero fun for good property operators. You’ll want to know your state laws inside out, but general overall guidelines typically include the following:

  • Notice period: Be aware of how much notice you need to give before starting eviction (it varies by state).
  • Documentation: Keep records of all notices and communication with the tenant. Know the paperwork and fees involved in filing an eviction case and understand your State’s law around digital communication.
  • Court process: Be prepared to present your case in court with all evidence.
  • Enforce eviction if needed: Use the sheriff’s department for enforcement if the tenant doesn’t leave willingly.

Fair housing laws

Fair housing laws at the federal, state, and local levels prohibit discrimination based on race, color, religion, sex, family status, national origin, disability, and other protected classes when it comes to the renting, selling or financing of housing.

A property management company should understand regulations around advertising vacant units, showing available rental property, qualifying tenants based on income sources, and providing reasonable accommodations.

Review your state and city statutes regularly and update rental policies to remain in compliance. Fair housing gets complex quickly, and lawsuits can happen before you know it.

HUD Fair Housing

Financial records

Property managers have to stay on top of all the financial details, making sure they’re keeping accurate and detailed records. Keep a detailed record of everything for each asset, like your ledgers, financial statements, and all those receipts. Follow all these accounting rules and make sure your procedures for managing rental properties are well documented.

When it comes to taxes and reports, aim to get them in accurately and on time. It’s also a good idea to do regular check-ups on your numbers to catch anything that looks off.

Insurance policies

Don’t forget to keep your insurance in check and make sure you’ve got the coverage you need for things like damage or liability. But here’s the key – don’t just set it and forget it. Markets change, and so do the values of your properties and the risks associated with them.

Make it a habit to review your policies frequently. Are your coverage levels still right? Are there new types of insurance out there that could be a good fit for your portfolio? Keeping up with these details can save you a lot of headaches down the line.

Lease agreement

Use a lease agreement that follows your state’s regulations surrounding rental contracts. Include details like names of lessor and lessee, property address, amount and due dates of rent payments, duration of occupancy, policies about guests, pets, smoking etc.

Outline procedures for security deposits, late payments, maintenance requests, and emergencies. Include grounds for eviction aligned with local laws. Review and update your standard lease annually to reflect changes to landlord-tenant statutes in your state. It’s a good idea to use an attorney when creating or modifying a lease template to verify it holds up legally.

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Lease renewals and terminations

Lease endings and renewals usually go smoothly…. until they don’t! When existing leases are wrapping up, send tenants the right notifications on what happens next per those state laws. If showing the rental property for re-rental, just be sure to use proper protocols. Document any incidents leading up to potential terminations to cover your bases.

Local building codes and regulations

For property management services, keeping up with with local building codes and rules helps you not get caught off-guard. Check on a regular basis to make sure everything’s in line with the latest standards and regulations. Things change, and they can change fast, so it’s on you to stay alert to any updates or shifts in those rules.

Noise and nuisance complaints

Managing tenant noise and nuisance issues involves a balancing act. As a property manager, you must enforce rules related to peaceable enjoyment on tenants who cause disturbances. But you have to handle it carefully so as not to violate tenants’ legal protections from discrimination or retaliation.

Review your state, county, and municipal ordinances covering noise restrictions. Implement resident guidelines aligned with relevant laws and address violations accordingly with fines or warnings per your policies.

Pet ownership

Managing pet ownership brings special considerations for rental management. It’s key to understand the legal differences between pets, emotional support animals (ESAs), and service animals. Communicate pet policies and restrictions during the tenant screening process, keeping these differences in mind. If you allow pets, collect pet deposits or fees to cover any potential damage caused by animals.

During the pet application process, verify current vaccinations and have tenants sign pet responsibility agreements. These agreements cover cleanup, supervision when pets are outdoors, noise issues like barking, and any size or breed prohibitions. Make tenants liable for adhering to the policy.

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Property maintenance and repairs

Having a process for maintenance is part of managing properties. When tenants need help, use property management software to record and triage maintenance requests. Maintaining on-call staff or preferred vendors helps reduce tenant disruption when issues arise.

You can also proactively address maintenance needs by conducting regular walk-throughs of units. Identifying and resolving deficiencies early prevents escalation of issues and minimizes tenant impact over time.

Rent control regulations

Rent control can show up in new areas, so stay in the loop. Make sure you understand the ordinances around rental rate caps, increases, vacancy decontrol, and exemptions. Dig into what properties apply, required tenant notices, approval processes for raises, and dispute procedures.

Rental income reporting

Reporting rental income can get tricky fast with all those forms, deductions, losses, and deadlines to track. Using systems that allow you to export tax-ready rental property finances makes it easy to document everything—earnings, expenses, profits/losses—for each rental property in your portfolio.

Rent increase procedures

Rent control can show up in new areas, so stay in the loop. Make sure you understand the ordinances around rental rate caps, increases, vacancy decontrol, and exemptions. Dig into what properties apply, required tenant notices, approval processes for raises, and dispute procedures.

Make sure the new rents fall within the range of comparable market rates and implement rent hikes when the lease renews.

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Safety standards

Make sure your properties comply with building codes, electrical and fire codes, housing quality standards, lead-based paint disclosure rules, and asbestos guidance. Use regular inspections to identify hazards or necessary repairs. Keep complete records of all maintenance activities and everything you do to fix problems.

State landlord-tenant laws

Check what the laws are for your state. Look at your state’s government website to see all the official rules. Or use a website like Nolo.com. They sum up the main laws for rentals in each state. This makes it easy to quickly get an idea of the basics.

nolo.com

Security deposits

Managing security deposits can be a pain if you don’t do it right. Make sure you collect the legally allowed amount, provide receipts, and keep funds separate—never mix with operating money. Conduct move-in and move-out inspections, take photographs, and write down any damages.

If you need to deduct from a deposit, let tenants in writing within the timeline your state requires. Mail disposition notices by certified mail itemizing everything.

Tenant complaints

You’ll want to have strong policies and procedures for handling tenant complaints and disputes in your rental business. As a property management company, follow these five key best practices:

  1. Implement a tenant complaint policy in leases outlining submission processes and resolution timelines.
  2. Log all complaints for tracking, categorization of issues, and identification of future policy/procedure adjustments.
  3. Investigate complaints promptly through inspection, stakeholder discussions, etc. Document findings.
  4. Offer reasonable resolutions to confirmed issues, following up with tenants on outcomes.
  5. Make tenants aware of mediation resources and state laws that can assist with serious unresolved disputes.

Tenant privacy

Make sure you remain up-to-date on relevant tenant privacy laws and rights. This includes regulations around things like proper notice before entering rental units, handling private tenant communications/documents, maintenance procedures, inspections, and more.

Tenant screening

We know a lot about tenant screening… after all, it’s our business! The best path here is to create your defined tenant criteria in writing first. Once you have this, give it to us to follow for every rental application.

Documenting your requirements gives you better chances of great tenants and keeping tenant turnover low. Having standard criteria also means your owners should not need to review applications. They should trust your process.

If you want a worry-free option for screening tenants, we’ll legally handle all of the following:

  • Verifying employment and income
  • Rental history
  • Credit scores and financial stability
  • Criminal background checks

You can also be confident in the legitimacy of the applicant’s information, since we verify identification, financial history, and income to confirm they are genuine. Our team uses data and advanced underwriting to spot fake documents, such as fraudulent bank statements , pay stubs and W-2’s.

RentZap also provides fully compliant tenant screening criteria that property managers can use on their own for a streamlined and legally sound screening process.

RentZap

Tenant subletting

Subletting and assignment clauses in leases allow tenants to transfer rights to a rental unit to another party legally. Review your state laws – some prohibit restrictions on subletting. If allowed in your market, the original lease should outline the tenant’s responsibilities around such transfers.

Tenants should submit subtenant applications detailing qualifications. Your management responsibilities include verifying that subletters meet your screening criteria.

Training

To keep your team sharp and informed, focus on regular updates in property management laws and technology. Use these sessions to directly apply new knowledge to your operations, helping your team stay compliant and operate more efficiently.

Rental property management wrap-up

Staying on top of the myriad legal considerations in rental property management is a juggling act for sure. No matter the size of the portfolio, core best practices help you to have success.

Use clear processes to track issues, safeguard deposits, enable transparent communication, and reasonably resolve disputes. This proactive approach focuses on stopping problems before they start. It also gives rental housing providers the freedom to focus on what matters – providing quality housing.

Managing rental properties: FAQ

How do you manage a lot of rental properties?

Use property management software, hire a property manager, and implement efficient systems for maintenance, tenant communication, and financial management.

How do you manage finances on a rental property?

Track income and expenses, set aside funds for maintenance and vacancies, and use accounting software or a professional accountant.

Can you self manage a rental property out of state?

Yes, with reliable local contacts, property management software, and remote communication tools.

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