United States – Property Letting

How does the property letting process work in the United States?

The United States operates without a single unified landlord–tenant statute. Instead, every state — and frequently individual cities — establishes its own rules governing leases, required notice periods, deposit handling, and eviction procedures. This stands in sharp contrast to countries with centralised tenancy oversight bodies, such as Ireland’s Residential Tenancies Board. Before letting begins, every landlord must thoroughly understand the specific laws applicable to the state and municipality where the property sits.

The letting process generally runs from advertising the property through to tenant selection, lease execution, deposit collection, ongoing tenancy management, and eventual termination. While verbal agreements can technically create enforceable tenancies in some common-law systems, US best practice strongly favours written leases — and for tenancies exceeding one year, many states legally mandate a written agreement signed by both parties.

Properties are typically marketed through platforms such as Zillow, Apartments.com, and Craigslist, or through local real estate professionals. Screening prospective tenants usually involves a formal rental application alongside a credit check, background check, income verification, and references from prior landlords. Landlords should be aware that in states where it applies, refusing to rent to a holder of a government housing subsidy such as Section 8 on the basis of that income source alone is prohibited.

A properly drafted lease agreement forms the cornerstone of the landlord–tenant relationship. It must set out key terms such as the monthly rent, payment due dates, tenancy duration, each party’s maintenance responsibilities, and deposit conditions. Standard leases also address pet policies, the notice required before landlord entry, restrictions on subletting, and any early termination provisions.

Both parties must follow prescribed procedures when the tenancy comes to an end. Month-to-month arrangements typically call for 30 days’ written notice from either side, whereas fixed-term leases may impose financial penalties for premature exit. The standard residential lease across the US runs for 12 months, and many leases convert automatically to a rolling month-to-month arrangement once that initial term concludes unless both parties agree to a renewal.

At the federal level, the Fair Housing Act bars landlords from discriminating against applicants or existing tenants on the grounds of race, colour, national origin, religion, sex, disability, or familial status. Numerous states extend these protections to additional categories, including source of income and immigration status. Breaches can result in substantial financial penalties.

What types of rental arrangements are available — long-term, short-term, and holiday lets?

The US rental market falls broadly into three categories: long-term residential lettings of 12 months or more, short-term furnished rentals generally under 30 days, and platform-based holiday lets facilitated by services such as Airbnb, Vrbo, and comparable sites. Each category carries its own regulatory requirements, tax treatment, and licensing obligations.

Long-term residential lettings are governed by state landlord–tenant legislation and represent the most straightforward path for a foreign property owner. They deliver predictable monthly income, well-established legal protections, and considerably lower operational complexity compared with short-term alternatives.

Short-term and holiday lets attract far greater regulatory scrutiny. Rent-controlled or rent-stabilised units often face specific restrictions on short-term letting activity. Major cities — including New York, San Francisco, Los Angeles, Chicago, and New Orleans — have passed local ordinances that restrict or require registration for short-term rentals. Such rules commonly cap the total number of nights a property may be rented in a calendar year, require the host to occupy the unit as a primary residence, or permit only a single room rather than an entire dwelling to be let.

Platform-based letting through Airbnb or Vrbo is popular yet subject to intensive city- and county-level regulation. Requirements differ dramatically between jurisdictions: some municipalities prohibit whole-home short-term lets outright, while others permit them on condition that the owner holds a valid short-term rental permit and collects and remits local occupancy taxes. Owners considering this model should consult their local planning or housing department before placing any listing online.

For tax purposes, the IRS treats any property rented for at least 15 days in a tax year as a rental property, whether it is a single-family home, apartment, condominium, mobile home, vacation property, or similar dwelling. This threshold is consequential: if the property is rented for fewer than 15 days in a given year, the rental income is generally not reportable and associated expenses are not deductible.

What rental income can landlords expect, and how are rates set?

Across most of the United States, rent levels are determined by supply and demand. Landlords price their properties at whatever the local market will bear, and there is no nationwide rent cap or government indexation mechanism. Achievable rents differ enormously by city, neighbourhood, property type, and condition. Coastal metropolitan areas — including New York, San Francisco, Los Angeles, Boston, and Miami — consistently produce rents well above the US average.

That said, a significant and expanding number of cities and states impose rent control or rent stabilisation rules that limit how steeply a landlord may raise rent for a sitting tenant. In California, for example, rent control covers older buildings erected before 1995. Landlords must provide tenants with proper written notice of any permissible increase each year as published by the relevant local Rent Board, and the cap can carry forward even when a new tenancy commences in certain circumstances.

In April 2024, New York City introduced the Good Cause Eviction law, which bars landlords from removing tenants from unregulated units without a legitimate reason and effectively ties rent increases in those units to reasonable limits. Oregon became the first US state to introduce statewide rent control legislation, applying annual increase caps to most residential properties. Given how localised these rules are, landlords should verify the regime in their specific city and county directly with the relevant housing authority or tenancy board, as provisions shift frequently.

For initial pricing guidance, landlords can consult listing platforms such as Zillow, Rentometer, and Apartments.com, commission a licensed local real estate agent, or review published market data from sources such as the US Department of Housing and Urban Development (HUD). Always confirm current achievable rents and any applicable rent control ceilings with your local municipality, as figures change regularly.

Do landlords need to provide a furnished or unfurnished property?

No US law compels landlords to furnish a rental property. Unfurnished lettings are overwhelmingly the norm in the long-term residential market, with tenants expected to supply their own furniture and freestanding appliances. A standard unfurnished unit typically includes built-in kitchen cabinetry and worktops, and in many markets a refrigerator, though the inclusion of ovens, dishwashers, washing machines, and dryers varies by property and location.

Furnished lettings are more prevalent in the short-term and corporate relocation market, and in certain high-demand urban areas where tenants are relocating from abroad or from another US city and require immediate accommodation. Furnished properties generally command a rental premium, but they also entail higher maintenance costs and may attract different tax considerations — particularly where short-term holiday letting is involved (see the tax section below).

There is no distinct legal classification in the US that triggers separate regulatory obligations purely on the basis of whether furniture is provided. However, any items supplied by the landlord — whether furnishings, appliances, or fixtures — must be in a condition that meets the statutory habitability standard imposed by every state. A landlord is prohibited from letting a property that is unsafe, unsanitary, or in breach of local housing codes, irrespective of whether the unit is furnished or not.

Do you need a licence or registration to let a property in the United States?

There is no federal landlord registration scheme or national licensing system in the United States. All such requirements originate at the state, city, or county level and differ considerably across the country.

For standard long-term residential lettings, many jurisdictions impose no landlord licensing obligation. However, an increasing number of cities now require landlords to hold a rental property registration certificate or local business licence before advertising or occupying a unit with a paying tenant. Cities including Washington DC, Philadelphia, and Baltimore have introduced mandatory landlord licensing programmes, and some also require periodic property inspections as part of the registration process.

For short-term rentals and holiday lets, the licensing obligation is both more widespread and more strictly enforced. Most major US cities now mandate a short-term rental permit or host registration, and many platforms such as Airbnb facilitate automatic collection and remittance of local occupancy taxes on behalf of hosts. Non-compliance can result in fines, enforced removal of online listings, or legal proceedings.

At the federal level, no prohibition prevents foreign nationals from owning residential real estate, and non-resident foreign owners face no additional licensing burden beyond that applicable to US residents for standard long-term lets. They do, however, face distinct tax compliance requirements, detailed fully in the tax section below. Landlords should contact their local city or county housing department to establish whether a rental licence or registration certificate is needed for their specific property type and location.

How do you obtain a landlord licence or register as a landlord?

Because requirements are set locally, the steps below reflect the general approach adopted by many US cities that require landlord registration. Always confirm the precise procedure with the relevant local authority, as processes and fees are subject to change.

1. Check local requirements: Visit the official website of your city or county government — typically the housing department, planning department, or business licensing office — to establish whether a rental licence, property registration certificate, or business licence applies to your property type. Searching for “[city name] landlord licence” or “rental property registration” is a useful starting point.
2. Prepare your property: Many jurisdictions require a property inspection confirming the unit satisfies minimum housing code and habitability standards before a licence is granted. Verify that smoke detectors, carbon monoxide detectors, electrical installations, plumbing, and structural elements all comply with local code requirements.
3. Gather required documents: Documents commonly required include evidence of property ownership (deed), government-issued photo identification (a passport for foreign nationals), proof of address, and — where applicable — an inspection report. Non-resident owners will typically also need their ITIN (Individual Taxpayer Identification Number).
4. Complete the application: Submit the application to the relevant authority — in many cities this is handled through an online portal, though in-person submission at the local housing or licensing office remains an option in some jurisdictions. Short-term rental permit applications are increasingly processed entirely online.
5. Pay the application fee: Costs differ widely by city and property type. As of 2025, licence or registration fees in cities that impose them typically fall in the range of approximately $30 to $300 or more per property per year, though this varies considerably — always consult official sources for current figures.
6. Obtain and display the licence number: A growing number of jurisdictions require landlords to include their rental licence or registration number in all listings and advertisements. Omitting this detail can attract fines.
7. Renew annually: Most rental licences must be renewed on an annual basis, sometimes with a fresh inspection. Keeping the licence current is essential to remain legally compliant.

For short-term rental registration specifically, an additional step involves enrolling with the relevant city platform — usually via an online portal — and ensuring that any listing on Airbnb, Vrbo, or a similar service displays your local registration number. The US Department of Housing and Urban Development (HUD) offers general landlord resources, but the authoritative licensing body will always be local to your property.

What are the rules around deposits?

Security deposits serve as a landlord’s financial safeguard against property damage or unpaid rent and are a standard component of US rental agreements. Most states cap the maximum deposit a landlord may collect, with the limit most commonly set at one to two months’ rent.

Unlike the UK and Ireland, which operate centralised government-backed tenancy deposit protection schemes, the United States has no national deposit protection programme. Instead, the majority of states require landlords to hold deposits in a separate, dedicated bank account, with some states additionally mandating that the account bears interest. The specific rules — including whether interest must accrue, and whether landlords are obliged to disclose the account details to tenants — vary from state to state.

Most jurisdictions set a statutory deadline within which landlords must return the deposit after the tenancy concludes — commonly 30 days. Any deductions for damage beyond normal wear and tear must be supported by itemised documentation and receipts. In New York State, the deposit must be returned within 14 days of lease expiry. In California, landlords have no more than 21 days following the tenant’s departure to return the deposit, deductions for ordinary wear and tear are not permitted, and any withheld amounts must be accompanied by an itemised statement supported by receipts or cost estimates.

From July 2024, California reduced the maximum permissible security deposit to one month’s rent. Prior to this change, landlords could collect up to three months’ rent as a deposit in addition to the first month’s rent paid at the outset of the tenancy — a significant tightening of the rules for California landlords. Landlords elsewhere should verify their own state’s deposit cap and return deadline with the relevant state attorney general’s office or housing authority.

Who is responsible for maintenance and repairs?

Every US state recognises a landlord’s duty under what the law terms the “implied warranty of habitability”. This obligation requires landlords to keep rental properties in a safe and liveable condition for the full duration of the tenancy, regardless of what any lease clause may say to the contrary. The warranty cannot be contractually waived and is enforceable in virtually every jurisdiction in the country.

Under this framework, landlords must provide structurally sound housing with functioning utilities and appliances, and must ensure the property complies with all applicable health, safety, and building codes at both the state and local level. Maintenance requests should be addressed within a reasonable period — generally 24 to 48 hours for emergency defects and up to 30 days for non-urgent repairs.

Tenants carry responsibility for keeping the property reasonably clean, avoiding damage beyond ordinary wear and tear, and notifying the landlord promptly of any maintenance issues. Where a landlord neglects required repairs after receiving reasonable notice, most states afford tenants a range of legal remedies — including the right to withhold a portion of rent, arrange and deduct the cost of essential repairs, or terminate the lease. Critically, a landlord cannot resort to self-help measures such as cutting off utilities, changing locks, or removing a tenant’s belongings — eviction must proceed through the courts.

While this framework broadly mirrors implied habitability obligations in other common-law countries, the absence of a single national enforcement body in the US means disputes are resolved locally — typically through small claims courts, specialist state housing courts, or local mediation schemes.

How are letting agents used in the United States, and what do they charge?

In the US, letting agents are most commonly referred to as property managers or real estate agents. They perform a central role in the residential rental market, especially for overseas landlords or those managing multiple properties. Their services typically encompass marketing, applicant screening, lease preparation, rent collection, maintenance coordination, and the handling of tenant communications and disputes.

There is no federal ceiling on property management fees in the United States. The tax rules that govern US real estate owned by foreign persons differ in important respects from those applying to US persons, and property managers working for non-resident foreign landlords operate under particular legal obligations. Specifically, a US-based property manager collecting rent on behalf of a non-resident foreign owner is legally classified as a withholding agent and may bear personal responsibility for deducting the correct amount of US tax from those rental payments before remitting the balance to the landlord.

As of 2025, ongoing property management fees in the US generally fall in the range of 8% to 12% of monthly gross rental income, with some operators charging a fixed monthly amount instead. Additional charges are common for tenant placement (typically 50%–100% of one month’s rent as a one-off fee), lease renewals, maintenance mark-ups, and periodic inspection visits. Fee structures vary considerably by market and provider.

Unlike the UK, where the Tenant Fees Act 2019 prohibits landlords and agents from levying most fees directly on tenants, the US has no equivalent nationwide restriction. A number of states and cities have introduced their own limitations on tenant-facing fees — California, for instance, now requires landlords advertising rental properties to disclose all mandatory fees upfront, preventing hidden costs from inflating headline asking prices. Landlords should verify the current fee regulations in their state or city with the relevant consumer protection authority and obtain quotes from multiple agents before making an appointment.

What taxes apply to rental income in the United States?

How US rental income is taxed depends fundamentally on whether the landlord is a US tax resident or a non-resident foreign national. The rules diverge meaningfully between these two categories, and non-compliance carries serious financial and legal consequences.

For non-resident foreign landlords: By default, a non-US person receiving rental income from US property is subject to a 30% withholding tax levied on the gross amount of each rental payment. Responsibility for remitting this tax to the IRS extends not only to the foreign owner but also to the US property manager — or any other person who collects rent on the owner’s behalf — and even to the tenant. The IRS is entitled to pursue any of these parties for failure to remit the correct amount.

Most non-resident landlords choose to sidestep the 30% flat withholding by formally electing to treat their rental income as Effectively Connected Income (ECI) with a US trade or business. By making this election, the non-resident agrees to file annual US income tax returns in place of the flat withholding obligation. This is by far the most widely adopted approach. It permits deduction of associated business expenses against rental income, which frequently reduces the actual tax liability to nil.

Before making this election, the non-US owner must first obtain a US Individual Taxpayer Identification Number (ITIN) if they do not already hold one. They must then complete IRS Form W-8ECI — a form that cannot be submitted until the ITIN has been issued. A fresh Form W-8ECI is required every three years.

A non-resident alien who makes a valid election under IRC section 871(d) to treat rental income as effectively connected income must file Form 1040-NR. Under the ECI regime, income is taxed at progressive rates applied to net income after expenses and deductions — the same graduated rate structure used for US residents and citizens.

Allowable deductions available to non-resident landlords making the ECI election include mortgage interest, advertising expenses, cleaning costs, property management fees, and many other costs ordinarily incurred in operating a rental property. Residential properties may also be depreciated over 27.5 years — a significant annual deduction that reduces taxable rental income each year.

For US citizens and residents letting property overseas: US citizens and green card holders are required to include foreign rental income in their US taxable income. The United States applies citizenship-based taxation, meaning that US persons are taxed on their global income regardless of their country of residence or where the income arises. Deductible expenses — including management fees, repairs, maintenance, insurance, and depreciation — can substantially reduce the taxable amount, and any residual US tax liability can often be offset through the Foreign Tax Credit, using taxes already paid in the country where the overseas property is situated.

Beyond federal income tax, landlords must also account for state and local taxes, which differ widely. Some states levy no income tax at all — Florida and Texas are notable examples — while others such as California and New York impose significant state-level income taxes. Short-term rental income is additionally subject to local occupancy taxes in many cities. Consulting a qualified US tax adviser with cross-border property experience is strongly recommended, and the IRS guidance for non-resident aliens with US real property provides current official rules.

What are the rules around ending a tenancy or evicting a tenant?

The United States has an established legal framework governing tenancy termination and property recovery. One of its most important principles is that self-help evictions are unlawful in every US state. A landlord seeking to remove a tenant must initiate court proceedings; changing the locks, cutting off utilities, or removing a tenant’s personal belongings from the property are all illegal, regardless of the tenant’s conduct.

Eviction laws continue to evolve as legislatures seek to balance the rights of landlords and tenants. In 2025, landlords must adhere to strict procedural requirements before evicting a tenant, including serving written notice and allowing a grace period within which tenants can remedy the alleged breach of their lease. In many states, mediation or a formal court hearing is now required before eviction proceedings can advance.

Required notice periods differ significantly by state and by the reason for seeking possession. In Illinois, for example, a landlord must serve written notice specifying the grounds for eviction. Where the reason is non-payment of rent, five days’ notice to pay or vacate is required. Where the eviction is based on a lease violation, a 10-day notice period applies. For month-to-month tenancies being terminated without any specific breach, most states require 30 days’ written notice, though this period varies.

The broader trend across major US cities and states has been toward strengthened tenant protections in recent years. More jurisdictions now require landlords to demonstrate valid “just cause” — such as repeated non-payment of rent — before proceeding with eviction, effectively curtailing no-fault removals. In April 2024, New York City enacted the Good Cause Eviction law, preventing landlords from removing tenants from unregulated apartments without a legitimate reason. California’s Tenant Protection Act has similarly tightened no-fault eviction rules across the state, and the direction of travel in most high-population states continues to favour tenant security.

Once a valid notice period has elapsed and the tenant has not vacated voluntarily, the landlord must file an unlawful detainer action — also described in some states as a summary possession or eviction proceeding — in the local court. If the court decides in the landlord’s favour, a writ of possession is issued and the sheriff or marshal carries out the physical removal if the tenant still refuses to leave. The full process typically spans several weeks to several months, depending on the state and local court backlogs. Instructing a local real estate attorney is strongly advisable for any contested eviction.

What should expat landlords know about managing property remotely?

Letting US property from abroad creates both practical and legal challenges that require careful advance planning. The single most important practical step is engaging a licensed US-based property manager who can handle day-to-day operations, coordinate maintenance, collect rent, and communicate with tenants on the landlord’s behalf.

The US tax rules for foreign property owners differ in important ways from those applicable to US persons, and this extends to the obligations of anyone managing a property on behalf of a non-resident landlord. A US-based property manager or even a tenant who remits rent directly to a non-resident landlord abroad may be treated by the IRS as a withholding agent, responsible for deducting and remitting the 30% withholding tax. Non-resident landlords should make the ECI election and provide their property manager with a completed Form W-8ECI to prevent this default treatment from applying (see the tax section).

As a non-resident with US rental property, failure to comply with IRS tax requirements can lead to a lien being placed against the property. Non-compliance can also adversely affect the foreign owner’s US immigration status. These risks are serious and underscore why professional tax and legal advice is indispensable for any foreign landlord with US holdings.

Executing a power of attorney — drafted in accordance with the laws of the state in which the property is situated — enables a US-based representative to execute documents, deal with local authorities, and manage legal matters on the landlord’s behalf. This is particularly valuable for foreign owners who are unable to travel to the US regularly. The power of attorney should be properly notarised and, where necessary for international recognition, apostilled.

There are generally no restrictions on transferring rental income out of the United States to another country, provided the landlord has fulfilled all US tax obligations. The US imposes no exchange controls. However, the landlord’s home country may have its own reporting requirements for foreign-source rental income. Always seek advice from qualified professionals in both jurisdictions.

Where a foreign owner holds US property through a foreign entity — such as a company incorporated in their home country — that entity may be subject to Beneficial Ownership Information (BOI) reporting obligations with FinCEN. The rules in this area remain subject to ongoing litigation and are liable to change, making specialist advice on entity structure strongly advisable.

Frequently Asked Questions

Can a non-resident foreign national own and let property in the United States?

Yes — no blanket prohibition on foreign ownership of residential real estate exists at the federal level. The US generally extends to foreign buyers the same rights to purchase and hold property as it does to its own citizens. Certain state-level restrictions do apply in limited circumstances — particularly for agricultural land or properties situated near military installations — so it is always advisable to verify the position with a local attorney.

Do I need a US tax identification number to let my US property?

Yes. Non-US owners must obtain a US Individual Taxpayer Identification Number (ITIN) if they do not already hold one. Applications are made using IRS Form W-7. An ITIN is a prerequisite for filing a US tax return and for completing Form W-8ECI to elect ECI treatment and avoid the default 30% withholding tax on gross rental receipts.

What is the 30% withholding tax for non-resident landlords, and can it be avoided?

Under the default rules, FDAP (passive) income received by non-resident landlords — including rental receipts — is subject to a 30% tax on the gross amount collected. This default position can be avoided by electing to treat the rental activity as effectively connected with a US trade or business and agreeing to file annual US income tax returns in place of the flat withholding. This is the most widely adopted approach, as it permits deduction of associated rental expenses, which frequently reduces the actual tax liability to zero.

Do I need a letting agent or property manager to let my US property?

There is no statutory requirement to appoint a property manager, but it is strongly recommended for any foreign landlord managing property from abroad. A licensed US property manager handles tenant screening, rent collection, maintenance coordination, and legal compliance — and, critically for non-resident owners, fulfils the role of withholding agent and tax remittance facilitator. Typical management fees run from 8% to 12% of monthly gross rent as of 2025; verify current rates in your local market.

How much security deposit can I charge tenants?

Most states regulate the maximum security deposit, with the cap most commonly set at one to two months’ rent. As of July 2024, California reduced its cap to one month’s rent. New York also limits deposits to one month’s rent for the majority of residential tenancies. Caps and statutory return deadlines vary by state, so always check the rules applicable to your specific location.

Does rent control apply to my US rental property?

Rent control is not national policy in the US — it is administered at the city and state level and typically affects older residential buildings in high-cost markets such as New York, San Francisco, Los Angeles, and Washington DC, among others. As of 2025, Oregon is the only US state with statewide rent control legislation. Contact your local housing authority or municipality to determine whether rent stabilisation or rent control rules apply to your property.

What are my obligations if a tenant does not pay rent?

A landlord cannot remove a non-paying tenant through self-help. The correct procedure requires serving formal written notice — typically 3 to 5 days’ notice to pay or vacate, depending on the state — and, if the tenant fails to comply, filing an unlawful detainer or eviction action in the local court. In 2025, landlords must follow strict procedural requirements before pursuing eviction, including providing written notice and allowing a grace period for the tenant to remedy the breach. A local real estate attorney can advise on the specific requirements in your state.

Do short-term lets via Airbnb or similar platforms require a licence in the US?

In most major US cities, yes. Short-term rental regulation is set at city and county level and varies widely between jurisdictions. Many cities require a short-term rental permit, host registration, and evidence of primary residency, while some ban whole-home short-term lets entirely. You must check the specific local rules before listing a property on any platform. Airbnb and Vrbo automatically collect and remit local occupancy taxes in many jurisdictions, but the obligation to hold a valid licence remains the landlord’s own responsibility.