May 1, 2015
The Official Guide to Becoming a Landlord
=”text-align: left;”>Gordon Stein is a real estate professional here at Keller Williams. With over 7 years experience in buying, renting, and selling homes in and around Philadelphia he is lending his expertise with you. Contact Gordon at 267-570-3757 or Gordon@atacangroup.com.
=”text-align: left;”>Sick of paying your landlord every month, ever think about becoming a homeowner? Better yet, have you ever considered owning some rental properties and becoming your own landlord? Well here are some quick tips to get you started in the right direction:
Do you need a license to be a landlord?
Yes, there are 3 licenses that you need to apply for through the city
Ever wonder how you can screen tenants?
There are some great resources out there that cost about $10-50 per application. Make sure to run credit scores, criminal background, and eviction history.
Make sure each leaseholder is jointly and severely liable for the rent to be paid monthly. If one roommate does not pay, the others are on the hook. The last thing you want to do as a landlord is chase down individual roommates for rent. Have each roommate hold each other responsible to pay their bills!
Renting to Students?
If the tenant does not meet the income requirements (Monthly income must be 2.5-3x the monthly rent) then get a co-signer. Co-signers can be parents, family, friends. Just make sure you run the proper screening on the co-signer as well.
Depending on the property or situation, you typically want to keep an open pet policy and market your rental as owner permission required. If you’re truly worried about damage it may be a good idea to collect a separate pet deposit.
Marketing- Where do I market my property?
There are some great free resources such as Craigslist, Zillow, Trulia, Postlets, Hotpads…etc. Just make sure you renew your listing daily if required.
Make sure you always account for money for turnovers. Not every repair between tenants can be deducted from your past tenants deposit. Such things as ordinary wear and tear are a landlords responsibility to pay for. Make sure you account for cleaning, painting, new bulbs, air filters, and always make sure to test smoke detectors, fire extinguishers, and CO detectors.
First month, last month, and one month security is the norm in Philadelphia. 1st month usually takes the property off the market with the application and then the additional 2 months are due before move in.
Renewals-Make sure to have your lease start in the Spring Summer. if a tenant wants a 6 month lease but it brings you to the winter, you should re-consider. As a landlord the most desirable time to rent your property is from March -September. You have the most demand and can yield the highest rents.
Due to rising taxes and increased cost of living, typical rent increases in Philly are about 3-5% annually. If you have great tenants who respect your property and the increase is going to force them out, you may want to reconsider. It is always cheaper to keep your current tenants then to seek a rent increase and incur turnover costs and possible vacancy.
Be very careful when dealing in real estate without a licensed professional. There are strict fair housing laws that you must abide by to protect yourselves from possible lawsuits. One quick tip is to make sure you stay consistent with your policies from tenant to tenant. If you do for one, you have to do for all type mindset.
Keep in mind, you can always higher an experienced Realtor and property manager to help lease and market your property for you. They will handle all showings, screen the applications, and create the perfect lease. And always remember to treat your property as a business! it is an income property after all!