Peak rental season is approaching, and a new set of landlords could be entering the market. Zillow economists predicted that 2023 would bring a surge in first-time landlords after record-low mortgage rates spurred increased investment in second homes in 2020 and 2021. In March 2023, Zillow saw a 22% year-over-year increase in landlords listing their properties for the first time using Zillow Rental Manager.
To provide insight into the commitment of managing a rental property to this new class of landlords, Zillow surveyed first-time and repeat landlords to learn what the most burdensome parts of the process are for them. The typical (median) landlord who completed the survey reported having two rental properties.
According to Zillow's survey data1, almost all landlords (92%) said repairs or maintenance were among the top three most demanding responsibilities of managing a rental property, and 40% considered it the No. 1 most burdensome. Screening tenants (reading applications, completing background checks and credit checks) was a close second, with 71% of landlords reporting it among their top three most burdensome activities.
More than one-third of landlords (36%) said they wished they would have known how hard it would be to find reliable renters, and managing the rental (communicating with tenants, accounting, etc.) was more time-consuming than they had anticipated. Thirty-four percent also noted that they wished they would have known the leasing process (processing applications, scheduling tours, writing a lease, etc.) would take more effort than expected.
"Investing in a rental property can provide reliable income and housing for a renter who needs it, but it's crucial for landlords to understand the responsibilities," said Manny Garcia, a population scientist at Zillow. "Many landlords wish they had known more about the effort required to find tenants and keep the property in good condition."
Staying on top of the needs of current tenants and leasing a rental take time and effort. Zillow Rental Manager provides landlords with the right tools to support them throughout the process, for free. In addition to offering housing providers an easy way to create their listing and get free access to the most visited rental network, Zillow Rental Manager has a ton of resources available now (and coming soon) to help them manage their portfolio and optimize their investment.
Among those resources:
- Applications and Tenant Screening: Landlords using Zillow Rental Manager can enable Zillow's universal application process for prospective tenants. Applicants pay a one-time screening fee on Zillow — and it doesn't cost landlords anything. Landlords receive a potential tenant's application, including a background check, credit report, eviction history and income verification.
- Leases: Landlords can upload and sign an existing lease or customize a brand-new one. Zillow's free online lease builder guides housing providers through each step of the drafting process, so they don't have to guess what's covered. In 34 states, landlords can access templates tailored to their region and customize based on parameters regarding parking, pets, etc.
- Payments: Rent payments can be deposited directly into a landlord's account when that landlord opts into payments via Zillow Rental Manager. Plus, renters can set up autopay so landlords know when they'll get paid each month. Zillow's online payments are free for landlords, and there's no fee for tenants who pay with ACH. Tenants can also pay rent with a credit or debit card for a small fee.
- Maintenance Tracker (coming soon): When launched, landlords will be able to create a checklist of maintenance needs for each of their properties as well as track their tenants' requests, keeping everything organized and in one place.
To read the full report, including more data and methodology, click here.