Many people are intrigued by the idea of being a landlord, and collecting rent on property they own to help pay for it. When you own more than one property, renting out those that aren’t your primary residence may be a good idea. While it is a good idea to rent out your property, managing it can be time-consuming and sometimes costly. Knowing what being a landlord entails before you take the leap can set you up for success. It is important to know if/when you’ll need to hire a landlord-tenant lawyer NYC, when and how much you can raise rent prices, how much to charge for rent, and so much more. Here are a few things you should keep in mind prior to renting out your first property.
Establish a Reasonable Rent Price
All too often, new landlords make the mistake of thinking they can charge an exorbitant price for their property, regardless of what other nearby properties rent for. Often this is because you are now dependent on the rental income to cover the mortgage, insurance, and other associated costs. Chances are you’ll have stiff competition to keep your property rented, which means you’ll need to make your rental price competitive. But you should still make enough to cover all the expenses and make a profit.
Make Collecting Rent a Priority
In real estate, rent collection is the revenue that drives your success. Therefore, you’ll need to be diligent to make collecting rent every month a priority. Establish clear expectations with your tenants that clearly define when rent is due, how many grace days they have for late payments, and consequences for late or non-payment. Consistently charge a late fee for any payments that are made after the grace period ends. Always try to be fair and consistent.
Keep Meticulous Records
A benefit of owning rental properties is the several tax benefits to landlords. In order to benefit from these tax benefits and write off some or all of your maintenance fees, mortgage interest, insurance costs, and listing fees, you’ll need to keep meticulous records. Keep a copy of every expense related to your property, either a paper copy or an electronic copy. This will be especially crucial if you own and manage more than one property. It is also recommended that you take photographs before a tenant moves in and occupies a property. This will serve as a record for the condition of the property before they move in and will serve as a reference to assess any damage when they move out.
Know Your Local Laws
It is going to be imperative that you know and understand the laws for your area. These laws may dictate how you, as a landlord, can conduct business with your rental property. These laws determine residential zones and commercial zones. Additionally, these laws can dictate who (landlord or tenant) is responsible to pay for what, i.e. heating cost. Laws will also dictate how much you are able to raise rent prices each year. When you know and are familiar with the local laws for your area, you’re more inclined to be in compliance with rent increases, evictions, building codes and everything else that comes with being a landlord.
Plan for Vacancies
As previously mentioned, many landlords depend on their rental income to cover the associated cost of owning multiple properties. Therefore, it is going to be critical that you plan ahead for any potential and unforeseen vacancies, including setting money aside for such instances. If you are having a hard time finding tenants to rent your property, you may need to consider lowering your rent prices.
As a property owner who is seriously considering looking into becoming an NYC landlord, it may be beneficial to sit down and talk to a landlord-tenant lawyer NYC to know exactly what it takes to be successful. Warren S. Dank, ESQ., P.C., has years of experience helping landlords navigate New York City landlord-tenant laws. Before you venture out on your own, contact Warren S. Dank, ESQ., P.C. today.