New York City is known as a tough place to be a landlord

The vacancy rate in Manhattan is near zero, so landlords can be as choosy as they want. If you’re a landlord in the rest of America, you might be surprised to see the typical paperwork a prospective tenant in Manhattan must produce in order to be taken seriously.

While most landlords like to see pay stubs and references, and will run a tenant credit check and background screening, New York landlords require a gross income between 40 and 50 times the monthly rent. In addition, they will likely ask prospective tenants for bank statements, tax returns and proof of employment.

What else should the tenant be expected to produce on the day they view an apartment? A check for the first month’s rent, the security deposit, and a broker’s fee of 8 – 15% of an entire year’s rent.

Without all the paperwork and high enough income, would-be tenants can kiss an apartment goodbye. Of course, paying several months’ rent up front can ease that situation, as well as help tenants relocating from overseas secure an apartment without an established credit history in the U.S.

Another option for tenants is to contact a lease insurance company. For a fee of between 75 – 85% of a month’s rent, the firm will cover a tenant’s rent if they stop paying and the landlord obtains a judgment.

As for the rest of America, the landlords we know require each prospective tenant to provide:

• Proof of income (pay stubs, income tax returns, etc.)
• Last two rental residences and landlord contact information
• Place of employment and reference contact information
• Personal references and contact information
• Co-signer information, if applicable
• Permission to run credit and background checks

No matter where you own rental property, why not be as careful as Manhattan landlords, and ask tenants for more paperwork than you think you need? You could end up with better tenants than you expected!

Tracking where your inquiries come from is an important side note here. If you’re not tracking sources, you don’t know which of your advertising dollars are working hard and deserve to keep going, and which you should retire.

Here are some advertising methods that work for the landlords we talk to. And keep in mind that in different areas, costs and effectiveness vary greatly. All you can do is keep track of what works for you.

Banners: There’s nothing like a large, colorful banner to grab the attention of drivers and pedestrians. No matter what size building it’s on, a proportionately-sized banner can really work. Make sure you word it in a generic way—today’s tough vinyl materials are meant to last, so don’t advertise any short-term rental deals, unless you plan to repeat them and re-use the banner.

Signs: Inexpensive plastic “For Rent” signs can be scattered throughout your property, or just placed in front near the sidewalk. But just don’t expect these to last—they tend to “walk away” and are meant to be temporary. Still, they do a good job of garnering attention. You can also place them in the windows of vacant units—so they cannot be stolen or blown away. Visibility could be less, but you’ll keep the signs longer! Some rental managers place “for rent” arrow signs at intersections; you should check the legality of this practice in your city.

Referral fees: offer your staff and current tenants a token of your appreciation for bringing in solid tenants. Knowing your minimum requirements is important, so be clear on your expectations. And of course, keep the Fair Housing Act in mind at all times, and don’t ever indicate a preference for one group over another.

“For Rent” publications: These specialized publications are typically used by multi-family complexes. They tend to be pricier than other advertising methods. But since calls can be directed to special numbers, you can easily track how well these ads are doing. The rental publications also give you the advantage of high production values, photos, and wide distribution.

Advertising can be cheap, free, or very expensive. Tracking ads is vital to keeping your rental property business profitable.

If you’ve made the decision to turn over the day-to-day management of your rental business to a property manager, keep these tips in mind for managing the individual or company you hire.

1. Even though the property management contract is signed, you’re not off the hook. You’re in charge, so you can feel free to take charge, be in control of the relationship, and require a certain level of performance from your rental manager.

2. Supervise their activities as well as you can. This can be a little more difficult if you are an out-of-town rental property owner. Still, you’ll want to avoid nightmares like unauthorized repair bills, erroneous charges, and poor rent collection. Require photos of repairs for proof they are done properly and to your satisfaction.

3. Be realistic. Some repairs will cost more than you think they will. Property managers shouldn’t have to call you for permission to spend $10 on your behalf. And emergencies happen—so don’t risk creating a bad relationship by complaining about emergency repairs—especially if they will save you money in the long run.

4. Remember, rental property managers are in business to make a profit. If they are providing a valuable service, you should expect to pay for it. Just be sure to check over invoices carefully, ask for clarification if don’t understand something, and require explanations of anything you don’t recognize as necessary.

5. Keep your contract handy and make sure they are following its terms. If rents are due in your account by the 15th of the month, and they routinely miss it by a day, they are in breach of contract. If monthly tenant reports, vacancy reports, and marketing reports are required—but are not happening—don’t let the property manager get away with it, or they’ll continue to do so. Be sure that you are abiding by the contract, too—remember you agreed to it.

6. If the terms of the contract you signed aren’t working out as you had hoped, ask to re-negotiate. It can’t hurt to ask. And if the relationship is still unsatisfactory at the end of the contract term, find another property manager. At least you’ll have a better idea of what works and doesn’t work for you.

7. Show the property manager that you’re the boss. Someone has to be in charge, and it’s your property with your tenants—and your liability. So that someone in charge should be you! Don’t pay for repairs you don’t authorize. Require pre-approval for any expenditures over a certain amount, like $100. Don’t allow tenants to sign leases unless they meet your criteria for tenant background screening and credit checks.

Property managers can be 100% honest, wonderful communicators, and an integral part of your rental property business. But not all of them are. When you hire a company to manage your rental property, you still need to manage the manager!

1. Is the contractor a member of your local building and remodeling association? Call them and find out! These associations are great sources for information and referrals. And generally, their members are experienced professionals who see value in associating with other professional contractors.

2. Is the contractor licensed and insured? Most localities and states require contractors to hold proper licenses. Most also require liability insurance—and closely scrutinize contractors. Before hiring one, ask your repair professional or contractor to show you their license and insurance coverage documents. Just because they say they do doesn’t mean a thing—and you don’t want to find out after they walk off your job or damage your property that your contractor has neither a license nor insurance!

3. Find out how they collect deposits and progress billings. We’ve all heard the nightmare stories of homeowners and landlords who are swindled by unscrupulous contractors. Paying large deposits—or the entire estimate in full—before the work has started is a risk. Some landlords never seeing the contractor again—and it happens every day. If your contractor is licensed by the state and a member in good standing of your builder’s association, you stand a better chance that they are reputable.

4. Does the contractor have excellent references? A good estimate and friendly personality doesn’t mean you should sign a contract. Too many people don’t check references—so too many dishonest contractors get away with illegal activities. Ask for references and call them. And be suspicious if they are too good—you could be talking to a friend of the contractor!

5. Does the contractor have a criminal past? As a landlord, you are responsible for the safety of your tenants. Imagine the potential liability of allowing an ex-con, thief, or sex offender around your tenants and their neighbors. For complete security, consider running a background check on the contractor you choose—before you sign the contract!

Women are signing home-buying contracts in larger numbers than ever before—up to 25% of all U.S. home purchases, according to the National Association of Realtors. If women are buying more homes, it makes sense that they are renting more homes, too.

So what do women look for when considering a new place to live? It can vary, of course, depending on the area, her lifestyle, and her needs. But builders who are training to become “certified” in women’s housing needs are reporting the following as big plus signs that women want:

1. Walk in closets: a must for every bedroom.
2. Closets that pull double-duty: gift-wrapping or craft stations are a big hit. Simple upgrades like cubbies, drawers, and a few big dowels that serve as wrapping paper rollers are easy and appreciated.
3. Nice-looking hardware on cabinets and drawers: contemporary, clean, and heavy hardware lasts and looks great.
4. Security systems: motion detectors and alarms help women feel safer in their homes.
5. Granite kitchen countertops: higher-end counters can help move a rental home from “for lease” to “lease signed” faster.
6. Plenty of bathroom storage: this includes “hidden” storage for easy access to everyday products like hair dryers, as well as for keeping reading materials out of sight.
7. Contemporary light fixtures: look up. If you see cheap-looking, 1980s lights, replace them quickly!
8. Quiet ceiling fans, bathroom fans, and dishwashers: women like peace and quiet, and “whispering” fans and appliances are everywhere these days, so why not provide them?
9. “Drop zones” where groceries can be placed just inside the kitchen door make good sense.

Not all rental homes are suited to such upgrades. But if you are targeting the section of the population who can afford a higher-end rental, you might be surprised at the simple things you can do to your property to make it more attractive to women renters.

And, it’s certainly true that many men want these same features in their homes, too. Many of these upgrades are just nice design features that appeal to everyone. Look through your vacant rentals and see about making a few smart upgrades that will target new tenants!

1. First, make sure any trash or property left behind by the previous tenant is removed. Whether you hold it for the previous tenant to pick up, trash it, or donate it is up to you.
2. Check the plumbing, heating, and A/C systems. Turn on every faucet, let the water run for few minutes, then turn it off. Make sure there are no leaks. Check around toilets, the dishwasher, and the garbage disposal, too. Be sure thermostats, filters and vents are working properly.
3. Change the locks, if necessary. Some landlords never change locks between tenants—others always do. Depending on your situation, either install new locks, have the existing locks re-keyed, or just check the locks to make sure they work properly.
4. Turn on appliances. Check the stove—does every burner heat up? Does the oven put out heat? Are the racks still there? How about the broiler pan? Also, run the dishwasher through a complete cycle—make sure it doesn’t get hung up or leak. Check the refrigerator and freezer to make sure they are cold, now warm. If your rental unit has a washer and dryer, turn them on too. Make sure the washer does not leak, and the dryer is properly vented.
5. Check cabinet and drawer pulls in the kitchen and bathroom. Are any missing or loose?
6. Look for torn or missing window screens. Check the windows, too. They should open and close easily. Locks must operate easily. Think of your tenants’ ability to open sticky windows or unclasp a stiff lock. In an emergency, windows and locks must operate smoothly and easily.
7. Clean, clean, clean. Whether you do it yourself or hire an outside firm, clean the rental unit thoroughly. Give the toilets and tubs, showers, sinks, mirrors, and floors in the bathrooms a good scrubbing; same for the stove and sink, countertops and refrigerator, tile and flooring in the kitchen; then, clean windows and sills, baseboards and carpeting throughout the rest of the house or apartment.
8. Check the storage area, shed, or garage—make sure there is no trash, dirt, or spider nests lurking behind. Ditto for outdoor living spaces, like balconies or patios.
9. Check smoke and CO2 detectors for proper operation. Make sure fire extinguishers are in place.
10. Finally, provide a new roll of toilet paper and paper towels—usually the first things people need in a new place. Your tenant will appreciate the thoughtful touch.

If you’re able, an inexpensive plant is a great welcome gift for your new tenant—and will start your relationship off on the right foot.

While effective rent was up from the previous quarter, it was still down 2.3% compared to the first quarter of 2009. However, that’s much better than the 5.6% decline we saw from 2008’s to 2009’s first quarter. This dramatic change indicates a reversal in rent decreases.

Strong markets that saw rent increases include Miami, New York City (the most competitive apartment market in the U.S.), Colorado Springs, Washington, DC, San Antonio, and Dayton, OH. Continued struggles were seen with lowered year-over-year rents in Las Vegas, San Jose, and San Francisco.

In Miami, effective rents for the first quarter gained 1.6% to $1,008 per month, and in New York, the gain was 0.9%, to $2,667 per month.

Vacancy rates remained unchanged—at the record level of 8%—during the first quarter. However, no increase can a sign the market is at or approaching the bottom of the vacancy pit and recovery is on the horizon. In New York City, vacancies even fell 0.1% to 2.8% from the previous quarter.

What about new construction? Well, 22,000 new apartment units opened in 2010’s first quarter, and their vacancy rate was a whopping 52.8%. And in 30 of the 79 markets studied, vacancies rose. But large investors are again looking at developing apartment properties—perhaps anticipating increased demand for next year.

Looking at the overall 1st quarter picture, it’s much brighter than reports were throughout 2009, so it’s possible that the apartment market will be on its way to recovery this year—as long as the economy picks up some steam, and some jobs.

Back in 2008, a woman tried to rent a home the realty company listed. She says she was rejected because she told the agent she had applied to adopt three children, adding to the three she already had living with her. If true, this is a clear violation of the Fair Housing Act.

She alleges the agent replied that they were “hoping to rent to someone without children,” or something to that effect. The home was eventually rented to a family with one child.

What did the agent do wrong? Plenty: It is illegal to make rental housing unavailable or deny rental housing because of family status, under the Fair Housing Act. His statement, if true, violates the FHA.

The real estate company denies the allegations, and says there is no evidence to support them. Their side of the story is that the prospective tenant refused to pay the asking rent.

While there are always people who look for a lawsuit around every corner, and every suit has two sides, there is no doubt that being sued is no fun. It can cost landlords plenty of time and money. Even if you’re completely innocent, proving that is a big hassle. And what about the bad publicity? Innocent, defendants can suffer negative reactions for months or years to come.

The best way to avoid this type of lawsuit is to watch everything you say to prospective tenants. Don’t ask about their personal situation. Keep every conversation and interaction 100% professional. If they ask if the neighborhood is safe, have them look up local crime statistics online. If they ask if you like kids, tell them what you think about kids doesn’t matter, and that your job is to make sure the rental units are rented fairly no matter what the applicant’s family situation.

Base decisions to accept or reject each tenant applicant on the same factors: proper income level, verified employment and income, acceptable credit history check, passing criminal background screening, and any other verification you require.

Don’t judge any books by their covers—the scariest-looking people sometimes make the most peaceful, easiest tenants. And Mr. and Mrs. Clean could be hiding some scary secrets behind their appearance. In the landlord business—you just never know.

What are important factors to consider when setting up a rental property website?

1. Determine what you want the site to do for you. Do you want to communicate securely with tenants? Accept online rent payments or maintenance requests? What about making standard forms available for download? Or a classifieds area for your tenants, where they can advertise items to buy or sell? Or do you just want to promote and highlight your rental properties? Knowing exactly what you want will help your developer plan the site properly.
2. Make sure you can update the site yourself. Most sites these days are built on Content Management Systems (CMS). These database-driven platforms enable users to easily change and update content—with new text, photos, news, blog posts and articles.
3. Invest in a decent camera. You’ll want a wide range of quality photos to display your properties in their best possible light. Don’t forget to add captions so visitors know what they’re looking at. Make the descriptions inviting; keep in mind what your target tenants are looking for and use sales language that will appeal to them.
4. Be sensitive to discriminatory language and photos. Keep the Fair Housing Act (FHA) top of mind while putting together your website. Include a statement that your company does not discriminate against tenants based on race, color, religion, sex, national origin, family status, or disability. Include an Equal Housing Logo if you’d like. And if your photos show people, include a diverse assortment to make everyone feel welcome.
5. Do not include photos of tenants without their permission. And never feature photos of children on your website. This might seem to contradict the idea of showing a diverse range of people, but most parents do not want their children’s photos to appear on the internet where predators can find them. Stock photos are available online that feature models who have signed releases for publishing—these are a safer bet.
6. Be ready to promote your site. Don’t expect rental home hunters to just find it. Keep posting to Craigslist.com and any other advertising outlets your currently use, and link to your new site in every ad.
7. Finally, consider a “contact us” form. You want to make it easy for prospective tenants to find you. Be sure you’re ready to respond quickly to each inquiry. Your web developer can explain how this interface works, and how to set up an automatic reply.

Websites are powerful marketing tools for businesses of all sizes—consider developing one for your rental property business.

So what will make your rental property stand out from the rest? With tenants in the driver’s seat, asking for lower rents and other amenities, what can landlords and property managers offer them? What do quality tenants want?

Price, price, price: Tenants want to be sure the rent is in line with the going market rate.

Location, location, location: Parents want to be close to their child’s school. Most everyone prefers to be close to their work. Students like to be close to campus and to nightlife. Families want to be close to parks, grocery stores, downtown, the library—you get the picture. Convenience is a big factor.

Cleanliness: A spotless rental unit will appeal to everyone.

Fitness facilities: Apartment complexes with a bright, clean fitness room with newer equipment that works properly will score higher with most tenants.

Garages: A garage with an automatic door opener is a big draw to most mid-to-upper income tenants.

Appliances: Dishwashers are almost a must. Everybody loves washer/dryer hookups. And if your rental has the washer and dryer as well, it will be scored higher than one without.

Closets and storage: People need space to store their stuff. Lots of closets inside, plus decent outdoor storage for their toys are most appreciated by higher-income tenants.

Accessibility: For older renters and those with physical limitations, easy access to the property shows that you care (and for certain properties, is mandated by law).
Think about the type of tenant you want to attract, and add the improvements that will attract them. If your rental unit already has everything your target tenant wants, make sure your advertising says so!