Registered: 1178036590 Posts: 1
Reply with quote #1
I live in RI. I will be closing on a multi-family soon. I know I have a lot to learn. What are some good tips when just starting out?
Registered: 1169270040 Posts: 3,794
Reply with quote #2
If you have never been a LL before, the very first thing you need to do is get a good book on your state's landlord tenant law. You need to know this forwards and backwards. Pay special attention to deposit rules, ending leases, and eviction procedures. Read up on LL books (anything by NOLO is good). I suggest you look into joining a local LL association (search for a local chapter of REIA).
Decide on using leases or month-to-month agreements (each has its own good and bad points). Get a copy of a good agreement for whichever you choose (your local REIA may be able to provide on specific to yoiur area and state's laws). Start compiling all the forms you will need lease/rental agreement, unit's condition form, lead statement and booklet, and compile your house rules (what rules will your tenants be expected to follow?). Rules can cover everything from common area usage, parking, noise restrictions, pets, trash, late fees, tenant painting (don't allow it!), fixtures, utilities, etc. You need to decide what is important to you. Check local ordinances and state laws to see if any other forms are required. Then start figuring out what local market rents are in your area. (Is the building you are buying already occupied?) If so, you will need to get each tenant's deposit (& interest if applicable), their lease & rules, their applications, credit checks if they were pulled, etc. Get all of this no later than closing. YOU WILL REGRET IT IF YOU DON'T! You must honor all current leases until they end. Still, research local market rents to see if your building will need to raise rents after leases end. Once their leases end, start changing them over to your lease if you wish to keep the tenant. Also, start thinking about what you will use to judge an applicant. What criteria will you use? A certain FICO score? 2 favorable previous LL references? 3x the rent in income? Read up on Fair Housing Laws so you don't accidentally say something that someone would perceive as being discriminatory. You need to make a list of what criteria a favorable applicant will have. This list can vary by property, and even from season to season (you may have to relax your standards in the dead of winter to rent a vacancy). Then start thinking about how you will screen someone who is interested in renting from you. Most experienced LLs have a list of questions they start with as soon as someone calls. (Screen out the looky loos so you don't waste your time showing to someone who can't possibly qualify). Once they look at a place, they need an aplication to fill out. What info do you want them to include on that (it is easier to just get one from one of the LL sites for free for this). Then what will you ask their former LLs? How will you verify their jobs? How will you check to see if they really rent the place they say (instead of having their friends posing as a fake LL)? How will you check their credit? Their criminal background? The sexual predator database? And this is just the beginning. Once you get this down, you will have to learn how to deal with problem tenants, late rents, tenants that just disappear, repairs, emergencies, etc. Don't get discouraged. It is a lot to learn. It takes time to learn this job. Just take it one step at a time, read all you can, get a support group to give you good advice and encouragement, and find other LL sites to read for more information. Good luck.
Registered: 1178652599 Posts: 2
Reply with quote #3
are most landlords know how to fix things in the rental property ?
I guess what I am saying is that I am not a handyman. will that be a big disadvantage for getting into renting business ? thanks, Aroon.
Registered: 1163774960 Posts: 137
Reply with quote #4
piece of advice on beign able to fix things. Go to the library and get some book on the light stuff, a lot of the small stuff like dry wall patching, outlet replacing, and so on are not as tough as you might think, and it will save you a lot of money..
but get the legal info ingested first and might not want to tell the tenants your a new landlord, they might use that to their advantage..
Registered: 1169270040 Posts: 3,794
Reply with quote #5
About being a handyman.
No one starts out knowing how to do everything in a place. Heck, my father wouldn't even let me touch his tools when I was growing up. I never touched one until I was 18 years old. Start small, watch those home improvement shows (no, not those ditzy ones that show decorating ideas). But those DIY ones that show how to do each step. First start by learning how to repair drywall holes and paint correctly. (That will be half of your fix ups right there!) Then learn small plumbing repairs (how to change the washers in a dripping faucet, how to change the guts in a toilet, etc.). Learn other other tasks by watching the repairmen when they do the job. Most don't mind if you ask a few questions. If you find some good ones, you will start to use them consistantly for the rentals. When you do, they will give you even better service. Recommend good repairmen to your friends and have them tell the contractor that you said to call them. Word of mouth advertising is the best type for all contractors! I have referred so much business to my repairmen that I get discounts on their work and great service. I can even call them and ask "how do I..." and they will tell me how (no charge). I watched the builders put on the addition to one house and learned all about stick built construction. I researched what I didn't know in books and have put up several walls myself at rentals. I watched the cabinet guy put up cabinets. Last 2 kitchen renovations were designed by me, and put up with his help (never try to do cabinets yourself -too heavy!) Last house I bought was rewired top to bottom (yep, you know who did it!) A friend who was an electrical inspector checked out my work, then wired in the main to my breaker panel. It's taken me 20+ yrs, but I have learned how to do all kinds of things myself. Just start small. You'll make some mistakes along the way, we all have. But everything you do learn how to do will save you money. Best of luck.