More people are living with family members across different generations, from grandparents to adult children. This trend presents new opportunities and considerations for landlords. This guide will walk you through how to adapt your properties, screening processes, and leases to successfully manage multi-generational households.
Understanding the Multi-Generational Household Trend
A multi-generational household typically includes two or more adult generations living together. This could be adult children living with their parents, or grandparents living with their children and grandchildren. This arrangement is becoming more common due to a combination of economic pressures, the high cost of housing, and evolving cultural norms around family and caregiving.
For landlords, this trend can be a positive one. These households often seek stability and may result in longer tenancies. A combined household income can also mean a more financially secure tenancy. However, it also requires you to think carefully about your processes, from how you screen applicants to how you manage wear and tear on the property.
Marketing Your Property for Broader Appeal
When advertising a vacant unit, your goal is to attract qualified applicants by focusing on the property's features, not on the type of people you hope to attract. This is not only good marketing, but it is also essential for complying with the Fair Housing Act.
Highlight Relevant Property Features
Instead of describing a potential tenant, describe what your property offers. Certain features are naturally appealing to households that need more space or flexibility:
- Layout and Space: Mention the number of bedrooms and bathrooms, approximate square footage, and any flexible spaces. For example, “This home features a ground-floor bedroom and full bath” or “Includes a finished basement that can serve as a recreation room or den.”
- Accessibility: Point out features like a single-story layout, minimal stairs to the entrance, or wide doorways. These are factual descriptions of the property.
- Storage and Amenities: Ample storage is a universal plus. Mention walk-in closets, a pantry, a garage, or a storage shed. Also highlight amenities like in-unit laundry or a private yard.
Use Compliant Advertising Language
Your word choice matters. Describe the property, never the ideal tenant. Steer clear of phrases that could be seen as discriminatory.
- Instead of: “Perfect for a large family”
Try: “This spacious five-bedroom home offers multiple living areas.” - Instead of: “Ideal for empty nesters”
Try: “Enjoy single-level living in this well-maintained two-bedroom patio home.”
Focusing on the property's tangible benefits keeps your advertising compliant and allows all interested parties to decide if the space is right for them.
Screening Multiple Adult Applicants Fairly and Effectively
When a multi-generational group applies, your screening process needs to be consistent and fair. The key is to treat all adults who will be living in the unit as co-applicants and evaluate them against the same objective criteria you use for every other application.
Your Application Process
Require a separate application from every person over 18 who will reside in the property. This is a standard best practice that ensures you have the necessary information to screen all adult occupants. Each applicant should consent to a background and credit check. Provide all applicants with your written screening criteria before they apply. These criteria should include things like your required income-to-rent ratio, credit history standards, and any other qualifications, and must be applied equally to all.
Evaluating Combined Financials
You can assess the household’s total income against your standard requirements. For example, if your policy is that household income must be three times the monthly rent, you can sum the qualifying income of all adult applicants to see if they meet that threshold. Be consistent. If you allow unrelated roommates to combine their income, you must do the same for related applicants.
You will need a clear policy for how you handle mixed results. For instance, if one applicant has a low credit score but the others are strong, what is your process? Some landlords require every leaseholder to meet a minimum score, while others look at the overall financial health of the group. Whatever you choose, document your policy and apply it uniformly to avoid any appearance of discrimination.
Important: Always verify your local and state laws regarding occupancy limits. You can set a reasonable limit on the number of people who can live in your rental, but these limits must comply with all applicable fair housing and public health ordinances.
Structuring Your Lease for Multi-Generational Households
Your lease agreement is the most important document in your landlord-tenant relationship. For a multi-generational household, it’s your tool for setting clear expectations and protecting your investment.
Who Signs the Lease?
The best practice is to have all adult occupants sign the lease as co-tenants. This makes them “jointly and severally liable.” This legal term is critical. It means that every tenant on the lease is individually responsible for the entire rent payment and all other lease obligations. If one person fails to pay their share, you can legally hold the other tenants responsible for the full amount. This provides you with significant financial protection.
Key Clauses to Review
Review your standard lease to ensure it addresses the potential complexities of a larger household:
- Occupants: The lease should clearly name all tenants and any minor occupants. Include a clause stating that only those listed on the lease are permitted to live in the unit for more than a short, specified period.
- Use of Premises: Reinforce rules about noise, common area maintenance (if applicable), and parking. With more people and potentially more vehicles, clear rules are essential.
- Alterations: A household may want to make minor modifications, like installing a grab bar in a shower. Your lease should state that tenants must get your written permission before making any changes. Be aware of your obligations under the Fair Housing Act to allow for reasonable modifications for a person with a disability (often at the tenant's expense).
- Communication: To keep things simple, you can ask the tenants to designate one person as the primary point of contact for routine communication and maintenance requests. However, your lease should be clear that legal notices will still be provided to the premises or as required by law, and that all tenants remain responsible.
Managing Increased Wear and Tear
More people living in a space naturally leads to more use. As a landlord, it’s important to anticipate this and distinguish between normal wear and tear (your cost) and tenant-caused damage (their cost).
The Reality of Increased Use
Carpets in hallways, kitchen appliances, and paint will likely show their age faster in a home with more occupants. This is normal wear and tear. Proactive landlords budget for this by setting aside slightly more for maintenance and capital expenditures. When it’s time for a turnover, consider investing in more durable materials, such as luxury vinyl plank flooring instead of carpet in high-traffic areas. The upfront cost can pay off through a longer lifespan.
The Power of Inspections
A thorough move-in inspection is non-negotiable. Walk through the property with the tenants and document its condition with photos and a signed checklist. This creates an undisputed record. When the tenants move out, you can use this same checklist to identify any new damage that goes beyond normal wear and tear, which can then be deducted from the security deposit in accordance with your state and local laws.
Platforms like Rentari.ai can help you manage maintenance requests and inspection reports digitally, keeping everything organized in one place for you and your tenants.
Your Next Step: Review Your Processes
Adapting to the trend of multi-generational renting is a smart business move. These households can provide stable, long-term tenancies that are the foundation of a successful rental portfolio. By ensuring your marketing, screening, and legal documents are up to the task, you can welcome these tenants with confidence.
Before you list your next vacancy, take 30 minutes to review your standard lease agreement and written screening criteria. Make sure they are clear, comprehensive, and ready for a household with multiple adult applicants. This small investment of time will prepare you for the opportunities ahead.