Where to Start: The First Steps You Should Take as a New Landlord

As a first-time landlord, you want to get organized from the beginning to make your life easier.

Once you’ve decided to take the plunge into owning rental properties, your next steps will determine your chances of success.

1. Utilize Property Management Software

Keeping records of all your payments and expenses is an essential part of being a landlord.

Tax time will go much smoother if you have organized data, and you’ll be more likely to increase your deductions if you have maintained your records all year instead of scrambling last minute to find receipts.

You may also use property management software to advertise your property as available on listing sites, send and receive documents, collect rent online, and more.

It often helps you streamline your process and limits the number of programs you use to keep up with the aspects of your rental business so that things do not become mixed up.

2. Learn State Laws

Take some time to read the laws on tenant-landlord relations applicable in your state.

While this may not be the most entertaining reading you could do, it will help you know what is allowable and what isn’t.

You don’t want to accidentally overstep your boundaries because you weren’t aware of current regulations.

Always keep in mind that while some laws are federal laws and will cover everyone, there are often state and even city laws that you will be required to know as well.

Make sure that you do not cut corners when it comes to keeping up with the legal side of property management.

3. Inspect the Rental Property

While you probably had an inspection completed when you purchased the property, you’re now looking at it through the eyes of a landlord and prospective tenants.

Consider updates that need to be made to attract tenants and keep them long-term. Look at the appliances and think about replacing them if they are older and not energy efficient.

Make sure the carpet or flooring is in good shape and that all windows and doors work properly.

Take a look at the exterior as well.

The outside of the unit will be the first thing that the potential tenant sees when they look over the property, and their first impression may be a deciding factor if they apply or not.

It will be easier to rent your property if everything is in working order and not too old.

4. Meet the Tenants

If you’ve purchased a rental property that already has tenants, you’ll want to make meeting them one of your top priorities.

Introduce yourself and make sure they know how to contact you.

Let them know if any changes will be made in the near future.

Having a new landlord can be a frightening concept for some people and may cause them to look for a new place.

To prevent this from happening, take time to get to know your tenants.

5. Be Insured

If you didn’t get insurance coverage as part of your purchase, make sure you do it now.

You’ll want to protect your investment in case of damage.

You’ll also want to maintain liability coverage for your property for injuries or damage to tenants or guests.

Even if you obtained a policy when you were financing the property, you may want to review it now to determine if you need higher coverage.

Also make sure that you have the correct coverage.

Some policies are meant for property owners that live at the property and may not cover damages if you are not a resident in that home.

Check with your policy and make sure that it allows for renters.

6. Determine Maintenance and Payment Schedules

Now is the time to set up a business that’s efficient and productive.

Decide who will be responsible for maintenance — whether you’ll take care of all issues or hire someone.

Set up a list of contractors and companies to call for various issues, such as heating or air conditioning, plumbing and electrical problems.

When you work with one company, it will respond faster when you have a work order.

You also want to decide about payment.Set up a payment system that works for you and your tenants.

You may want to hire an outside company to manage payments and late notices.

You’ll also want to have an accountant to deal with your finances if you have multiple properties.

You may even find it beneficial for your accountant to take care of a single property if you plan to expand in the future.

Start out your business on the right foot, and you can eliminate many of the problems landlords face.

You can focus on keeping your tenants happy or finding new tenants and making money from your property.

What Is a Rent Stabilized Increase

In New York City and other urban areas where the free market rental rates can be higher than what some residents can pay, rent stabilized units are available at varying levels of vacancy.

These units are not controlled by landlord-tenant negotiations or the free market conditions of scarcity.

They are instead governed by a controlling board or group that oversees how much a landlord is allowed to raise their rent every year.

If an apartment, flat, single family home, or other rental unit does not have rent stabilization, then most jurisdictions allow a landlord to raise the rent on that unit to whatever amount they want.

If a tenant doesn’t have a rental agreement in place that guarantees them a specific rate, then they are forced to either pay the new rate, leave voluntarily, or face an eviction process.

Rent stabilization avoids much of this, but that doesn’t mean tenants in these units won’t face an increase amount of rent.

What is a rent stabilized increase?

It is a specific percentage that the governing board or group states is allowed for all stabilized rental contracts over a specific period of time.

It Is Possible to Have a 0% Increase

Rent stabilization is often based on factors like the local unemployment rate, annual average household income, and other economic factors.

The supervising board or group will allow a rent increase based on the increase or decrease of those factors.

If a community is struggling to find employment and household incomes are low for a year, then a 0% increase may be a very real possibility.

Most rent stabilized increases tend to be in the 2-5% range.

One exception to this rule is if a landlord is charging less than the maximum rent amount allowed.

They are allowed to raise the rent to the maximum during the next period, no matter what the rent stabilized increase happens to be.

Tenants may not be able to control how much they pay in rent from year-to-year in many situations, but rent stabilization increases do limit the damage in high population urban areas.

Most increase demands are received with 60 days’ notice, but it is up to each tenant to know what they may be expected to pay in the next 12 months with this type of living situation.

Contact your local authority with any questions.