You have signed a new management agreement. Now what? Before a single applicant walks through the door, you need to ensure the property is ready, priced correctly, and legally set up. Price rent too high and the unit sits vacant. Price it too low and the owner loses money every month — and eventually loses confidence in you. This module gives you the systems to get both right.
This module covers the operational fundamentals of getting a property rent-ready and priced correctly. Whether you are an employee preparing properties for your employer's clients or an entrepreneur onboarding your own, every lesson here applies directly to your day-to-day work.
Turner and Turner identify seven critical steps every property manager must complete before signing their first lease on a new property. These are not optional — they are the difference between a professional operation and an amateur one. Skipping any of them creates legal exposure, financial surprises, or operational chaos that is very hard to recover from once a tenant is in place.
Every property — or at minimum every owner — needs its own bank account. Commingling funds from multiple properties or personal accounts is a bookkeeping nightmare, a tax headache, and in the case of security deposits, potentially illegal. For fewer than five properties, maintain separate accounts per property. As the portfolio grows, a single management account with meticulous bookkeeping per property is acceptable — but the separation from personal funds is always non-negotiable.
The property owner must carry adequate landlord insurance — not a standard homeowner's policy, which typically does not cover rental activity. Before you accept any tenant applications, confirm the owner has a current landlord or rental property policy in force. Also confirm the policy covers the property manager as an additionally insured party. This protects you if a tenant is injured and names you in a lawsuit.
A policy binder documents how you run your operation: late fee policy, pet policy, smoking policy, maintenance request procedure, and your process for handling tenant move-outs. Having these decisions made in advance — in writing — does three things: it keeps you consistent (no on-the-fly decisions that contradict each other), it gives you a third party to reference when tenants push back ("our policy does not allow that"), and it makes your operation scalable when you add staff.
Before the first rent payment arrives, you need a system to receive it, record it, and account for it. Property management software (AppFolio, Buildium, Propertyware) handles this for most PM companies. At minimum, you need a way to track incoming rent, outgoing expenses, maintenance costs, and owner disbursements for each property separately. The time to build this system is before you need it — not during a late rent dispute or an owner's monthly reporting call.
Is the property legally permitted for rental use? Does it have all required operating permits, certificates of occupancy, and local rental registrations? Many cities now require rental property registration or periodic inspections. A property manager who places tenants in a non-compliant unit can face personal liability. This is especially important if you are taking over a property from a previous owner or manager — do not assume compliance was maintained.
Turner and Turner recommend stopping by neighboring properties, introducing yourself, and giving the neighbors your contact information. Ask them to call you if they notice anything unusual about the property. Neighbors are one of the most valuable early-warning systems a property manager has — they see what is happening at the property when you are not there, and they have strong personal incentive to report problems (nobody wants a troubled rental next door).
Before a tenant moves in, conduct a detailed move-in inspection and document everything with photos and a written condition report. This is your baseline — the record against which you measure the property's condition at move-out. Without a thorough move-in inspection on file, you cannot legally make deductions from the security deposit for tenant damage. This documentation also protects you and the owner if a tenant disputes the condition at move-in. Take photos of every room, every appliance, every wall.
Every state in the US imposes a habitability standard on rental properties — a legal floor below which a landlord cannot rent. This is not a suggestion; it is a legal requirement. A tenant who moves into a property that does not meet the habitability standard has legal remedies including rent withholding, repair-and-deduct, and lease termination depending on the state. Your job as a property manager is to ensure every property you manage meets this standard before a tenant moves in.
Roof, walls, floors, and foundation must be sound. No active leaks, structural damage, or collapse risk.
Hot and cold running water, functional toilets, no sewage backups, no significant leaks under sinks or behind walls.
Functional heating system appropriate to the climate. Some states require air conditioning in specific climates. All systems must be operational at move-in.
Functional outlets, no exposed wiring, proper grounding, working switches. No electrical hazards that create fire or shock risk.
Most states require working smoke detectors in each bedroom and hallway. Carbon monoxide detectors required in units with gas appliances or attached garages in most states.
The unit must be delivered free of rodents, cockroaches, bedbugs, and other vermin. Pest infestations that existed before the tenant's occupancy are the landlord's legal responsibility.
Not legally required but dramatically affects how quickly a unit rents and at what price. A freshly painted unit with clean flooring rents faster and attracts better applicants.
Modern appliances, updated light fixtures, and contemporary hardware allow you to command higher rents. The cost of upgrading often pays back in reduced vacancy time and higher monthly rent.
Griswold makes a counterintuitive point about property preparation: doing the work yourself to save money often costs more than hiring professionals. If your rental market is $50/day in rental income and painting yourself takes six days of evenings and weekends, you have "saved" $300 on painter fees while costing yourself $300 in vacancy income — and the professional would have finished in one day. Always calculate the cost of delay against the cost of the shortcut.
Sue Richie — an experienced property manager — walks through exactly how to prepare a rental property for a new tenant: the inspection checklist, what to repair vs. what to replace, how to think about the cost of preparation vs. the cost of vacancy, and how a well-prepared property sets the tone for the entire tenancy. Watch before Lesson 3.
Complete property preparation walkthrough — exterior curb appeal, deep cleaning standards, paint and flooring decisions, appliance checks, safety device verification (smoke detectors, CO detectors, locks), habitability checklist, move-in inspection documentation process, and how the quality of property preparation directly correlates with the quality of tenants who apply.
Sue Richie · Property management professional · YouTube
Pricing rent is one of the most consequential decisions a property manager makes — and most beginners get it wrong in one direction or the other. Griswold names the core tension with precision: if your rent is too high, you'll have difficulty renting your vacant unit. If it's too low, you'll have plenty of tenants but not enough money to cover costs and generate a return. Finding the right number requires combining two methods: a market analysis and a return-on-investment calculation.
The most reliable way to price rent is to research what comparable properties in the same area are actually renting for. Comparable means similar: same bedroom count, similar square footage, similar amenities, similar location. The market does not care what the owner paid for the property or what they need to cover their mortgage — it prices based on supply and demand. Your job is to find where the market clears for this specific unit.
Calculate what rent the owner needs to cover their costs: mortgage, taxes, insurance, maintenance, management fee, and a target profit. This gives you a floor — the minimum rent that makes the investment viable. If the market analysis shows comparable rents below this floor, the owner has a fundamental investment problem that rent pricing cannot solve. If the market supports rates above this floor, there is room to optimize.
Griswold recommends a systematic approach to comparable rent research — not just checking one website, but building a real picture of the local rental market from multiple sources:
Griswold identifies overestimating rental income as the most common and damaging mistake new property managers and investors make. It often comes from sellers or their agents using above-market rents, near-zero vacancy assumptions, and historical expenses (rather than projected ones) in their pro forma calculations. Always verify rental income projections against actual comparable rents — and build in a conservative vacancy allowance of at least one month per year. An optimistic rent estimate that never materializes destroys the owner's cash flow and eventually destroys their trust in you.
When presenting a rental price recommendation to an owner-client, bring your market research in writing — screenshots from Zillow, Rentometer, and comparable listings. Owners who understand how you arrived at the number trust it. Owners who receive a number without supporting data often push back. Your market analysis is part of the professional value you are delivering.
Rent pricing is not a set-it-and-forget-it decision. Markets move — sometimes quickly. A well-run property management operation reviews rents at every lease renewal against current market comparables, and raises rent when the market supports it. Griswold's conservative guidance: calculate your rental income at $50–$100 below full market rate to build in a buffer, and anticipate one month of vacancy per year in your financial projections. This is not pessimism — it is the discipline that keeps owners financially stable when markets soften.
This video walks through the four best free tools available for conducting a market rent analysis — how to use each one, what data each provides, and how to combine them into a defensible pricing recommendation you can present to a property owner with confidence. Watch before Lesson 4.
Walkthrough of the four best free rent research tools: how to use Zillow Rental Manager's Rent Zestimate, Rentometer's market comparison tool, Apartments.com's rental pricing tool, and how to cross-reference active listings to build a data-supported rent recommendation. Includes how to present this research to a property owner in a way that builds confidence in your pricing judgment.
YouTube · Rental property pricing tools walkthrough
The security deposit is one of the most legally regulated aspects of property management. Every state has specific rules about how much you can collect, where the funds must be held, how they must be accounted for, and under what circumstances you can make deductions. Violating security deposit law — even unintentionally — can result in the landlord owing the tenant double or triple the deposit amount in some states. This is not an area for guesswork.
Turner and Turner recommend setting the security deposit at one month's rent in most circumstances — the standard in the majority of US markets. This amount provides meaningful financial protection while not pricing qualified tenants out of the application process. In markets where pets are permitted, a separate pet deposit (typically $200–$500 per pet) is appropriate and legally permitted in most states. Some managers charge a higher deposit for applicants with weaker credit — if your state permits this, confirm the maximum allowed amount and document the decision consistently to protect against Fair Housing concerns.
Security deposit regulations — maximum amounts, holding requirements, interest obligations, return deadlines, and allowable deductions — vary significantly by state and sometimes by city. Before collecting a single dollar of security deposit funds, look up your state's specific landlord-tenant statutes. Your state's attorney general website or NOLO's state-by-state landlord-tenant law guides are reliable starting points. NARPM membership also provides access to state-specific compliance resources.
5 questions — click your answer, then check all at once.
1. A property owner tells you they can get $2,000/month in rent based on what they need to cover their mortgage, taxes, and insurance. Your market research shows comparable units are renting for $1,700–$1,750. What do you recommend — and why?
2. You take over management of a property. The previous manager never did a move-in inspection and there is no documentation of the unit's condition when the current tenant moved in 18 months ago. The tenant is now moving out and there is significant carpet damage. What is your problem?
3. A tenant moves out and leaves the unit with minor scuffs on walls, carpet that is 4 years old and shows normal aging, and one broken window blind. Which of these can you legally deduct from the security deposit?
4. Which of the following is a habitability requirement that must be met before placing any tenant — not just a market-competitive improvement that affects rent and vacancy rates?
5. Griswold recommends building in a vacancy allowance of at least one month per year when projecting rental income for an owner. A colleague says this is overly conservative — if you do your job well, vacancy should be near zero. Who is right?
Property Management Track
Module 3 of 7