The Essentials of Conducting a Rental Property Audit

The rental property business is thriving. But if you really want to make the most of it, you’ve got to conduct a regular audit of your investments.

Many landlords think this audit only covers thorough inspection to ensure your rental property is in top shape and working conditions. However, there’s more to this than you might think.

This page covers what you need to know about a rental property audit, particularly its key essentials. Read on to learn the key steps for conducting one—efficiently and effectively.

What Is a Rental Property Audit?

A rental property audit encompasses everything you need to examine in your real estate or rental business. 

For the most part, it refers to a thorough inspection of your rental property to assess and improve its overall conditions. The ultimate goal isn’t only to make it habitable but also safe and comfortable for your tenants.

However, a rental property audit goes beyond regular property inspections. It also focuses on boosting rental profits, ensuring legal adherence, reinforcing lease agreements, and building tenant-landlord relationships.

Lev Peker, CEO at CARiD, recommends conducting a thorough rental property audit. 

Peker says, “A rental property audit isn’t just about checking for your property but optimizing your rental investment. From boosting profits to strengthening tenant relationships, a thorough audit keeps everything running smoothly. Taking a holistic approach helps you stay ahead in a competitive market.”

According to the Business Research Company, the real estate rental market could grow from $2,693.47 billion in 2024 to $2,915.55 billion in 2025 at an 8.2% compound annual growth rate (CAGR). This market growth is due to the following reasons:

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• Market confidence 
• Consumer preferences
• Economic conditions
• Interest rates
• Global events

That’s why it’s best to conduct a property audit to maximize the potential of your rental business. 

Below are key areas to consider.

Key Areas To Consider in a Rental Property Audit

As noted earlier, a rental property audit isn’t solely confined to property examination. It also covers various aspects of your rental business to ensure you’re on top of everything for your real estate success. That said, here are the critical areas to factor in:

• Property condition inspection: The main focus of your rental property audit is to ensure your property is in top shape and in good condition for your tenants. If not, this thorough examination helps you identify, fix, and even upgrade problem areas.

• Rental ROI assessment: As a rental business, your ultimate goal is to boost your profits by income generated from your rental properties. As such, keep up rental property trends for maximizing ROI in 2025. ] For example, 2-4-family rental properties and single-family rentals held the highest on-time payment rates in January, coming in at 85.2%.

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• Legal compliance evaluation: As a landlord, the last thing you want to happen is to face legal and financial consequences due to non-adherence to laws and regulations. Therefore, as part of your audit, look into the legal aspects of rental property management.

• Lease agreement review: Not only should you write lease agreements that work, but you should also review the contract regularly. You want to ensure that both parties—you and your tenant—honor the agreements. So, this step should be a part of your regular audit.

• Tenant relationship assessment: You also need to evaluate your dynamics with your tenant to build good relationships. If not, you can take practical conflict management to resolve tenant disputes after your thorough evaluation.

Grant Aldrich, Founder of Online Degree, emphasizes what a property audit entails.  He cites areas to consider when managing your rental business.

Aldrich explains, “A rental property audit isn’t just a maintenance check—it’s a deep dive into your business. From cash flow and compliance to tenant rapport, staying on top of these key areas keeps your investment thriving.”

Learn the key steps for conducting a rental property audit in the next section.

How To Conduct a Rental Property Audit

Understanding the essentials of a rental property audit is one thing, conducting a thorough one is another. This begs the question: How do you achieve a successful property examination to meet your rental business objectives?

A rental property audit comes with a series of critical steps you would need to take. That said, here’s how to conduct one:

1. Set audit objectives and plans

As mentioned, a rental property audit includes various areas—from inspection to tenant evaluation. Likewise, it requires a thorough examination/review of these critical areas. Therefore, you have to set your goals and plans in place:

• Operational objectives: Define your specific goals for conducting a rental property audit. What do you aim to achieve: Is it to keep your property in good condition? To boost your rental profits? Or to improve landlord-tenant relationships?

• Action plans: Develop detailed plans for conducting a thorough audit. How will you perform a full house inspection? Analyze your rental income for the last six months? Or review all details stipulated in your lease contract?

Roman Zrazhevskiy, Founder and CEO of MIRA Safety, suggests starting with goal-setting and action planning for a rental property audit.

Zrazhevskiy shares, “A solid rental property audit starts with a game plan. Set clear goals—whether it’s maximizing profits, streamlining operations, or improving tenant relations—then map out the steps to get there. A well-structured audit keeps your investment on point.”

2. Prepare all the necessary paperwork

Before you get started, gather all the documents required for the property audit. But, of course, ensure you record various aspects of your rental business. As a landlord, you can take full responsibility or leave it to your property manager. That said, here’s what to prepare:

• Maintenance records: First, undergo a full property inspection before a tenant moves in—keep a record of it. Then, do the same while maintaining and repairing your property during the tenancy. Then, go ahead and prepare these records for the audit!

• Lease contract: It’s best to consult with legal experts to check the clauses in the rental contract. While doing the property audit, set this pertinent paperwork in place. You will need to review it in detail during the actual audit!

• Financial statements: You or your property manager should have proper bookkeeping and accounting for your rental property business. Prepare all the necessary documents for the actual audit to see if you’re earning!

• Other documents: You should also prepare other necessary documents, such as insurance policies and warranties. This is especially true if you or your property has been covered 

under certain circumstances! 

Andrew Bates, COO at Bates Electric, recommends accurately recording all the details of your rental business.

Bates cites, “A rental property audit is only as good as your records. Keeping detailed maintenance logs, lease agreements, and financial statements ensures a smooth audit and a stress-free rental business. Accurate paperwork keeps everything running like clockwork.”

3. Perform the actual property audit

Now, it’s time to perform the actual audit of your rental property. Of course, we have to go back to the key essentials cited above:

• Property inspection: Perform a thorough examination of your rental property. First, inspect for structural damage, from the roof to the walls to the flooring. Also, check your plumbing, electrical, and HVAC systems. Finally, include common areas and amenities, if applicable.

• Financial audit: What better way to do this than to review your rental business books? See how much you’ve earned (rental income) versus how much you’ve spent (rental expenses)  for the last 12 months. 

• Legal matters: Familiarize yourself with the laws and regulations governing the rental business. For instance, understand the Fair Housing Act and how it impacts your rental business. More importantly, review legal matters you’ve been involved in, like the eviction process.

• Contract review: Of course, the lease agreements put into writing protect both parties—you as the landlord and your tenant. Review this during the actual audit to ensure both parties strictly follow the agreements. If not, take proper steps accordingly and legally!

• Tenant concerns: It’s important to establish good landlord-tenant relationships to avoid conflicts. As a landlord, you always have your tenant’s best interest in mind, like offering the smart home features they are looking for!

Take it from Gary Hemming, Owner & Finance Director at ABC Finance. Hemming says, “A rental property audit is your blueprint for a well-run investment. Inspect the property, crunch the numbers, review contracts, and address tenant concerns. A thorough audit keeps your rental business profitable and hassle-free.”

4. Take action on critical rental issues

Your rental property audit won’t mean anything if you don’t take proper action. You’re doing this to address areas of concern, whether fixing structural damage, handling contract violations, or addressing tenant issues. Here are some steps you would need to take after the audit:

• Property upkeep: After the inspection, property maintenance and repairs follow suit. For example, you might need to undergo property renovations and upgrades to reduce wear and tear in the future. 

• Rental rate adjustment: If you find out you spend more than you earn on your rental business, you might need to adjust your rate. Of course, follow the standard market value based on factors like your property type, amenities, location, and more. 

• Legal compliance: Take legal action should there be legal non-adherence or contract violations. A case in point is dealing with subletting. If your lease contract doesn’t have a clause for this, consult your legal representative and talk to your tenant.

• Addressing tenant issues: During the actual audit, you’ll find that tenant concerns vary. So, your course of action depends on what they need. For instance, if your tenant needs to adjust the rental payment schedule due to a delayed payout, consider this!

Learn from Chris Aubeeluck, Head of Sales and Marketing at Osbornes Law. He believes everything about a rental property business should be put into writing.

Aubeeluck claims, “A rental property audit means nothing without action. Document everything—maintenance plans, rent adjustments, legal steps, and tenant concerns—then follow through. A well-documented approach keeps your rental business fair, efficient, and legally sound.”

Final Words

A thorough audit is crucial for maximizing the potential of your rental business. Understand, however, that it doesn’t solely focus on property inspections. It also includes financial review, legal evaluation, lease assessment, and tenant relationships.

Follow the crucial steps above for conducting a rental property audit as reinforced by business experts. More importantly, take concrete actions to address areas of opportunities, whether upgrading your unit, boosting your rental ROI, or enforcing lease agreements.

If you plan to put your rental property audit on record—all in one place, leverage a unified property management software for landlords. Sign up with your email today to get started with us!