Looking to buy first Property and be landlord. Advice/tips?

Staten Island, NY · Member since 2015 · 265 posts · 59 votes

Hello all, I know the basics already that I need to secure financing, get pre-approved for a loan, do my analysis on some properties I am interested in and of course find a realtor and just check out some homes. Now say that I do find a property that I close on, what inital steps should I take as a landlord/investor. Btw I will be investing about 1 hour away from my home. I live in NYC, but I am going to invest in Pennsylvania. What is the admin side of things that I should keep in regards to records/documents? Also what documents should I be giving to tenants whether they are already there or I have to find new ones?

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Brian Adzadi

Allentown, PA · Member since 2016 · 515 posts · 404 votes

@Eric DeVito

What part of Pennsylvania are you investing in? Give us more content about the property and we will see how to help you and what suggestions we would give you.

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Brian Adzadi
Allentown, PA · Member since 2016 · 515 posts · 404 votes
8y
@Eric DeVito
What part of Pennsylvania are you investing in? Give us more content about the property and we will see how to help you and what suggestions we would give you.
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Basit SiddiqiBusiness Member
Accountant · New York, NY · Member since 2015 · 8k+ posts · 3k+ votes
8y
If you do not have a tenant - you will need to find one.
You can do this yourself(advertise on craigslist or other websites) or use a property manager/real estate agent to find you a tenant.

Once you have a potential tenant - you will need to decide if he/she is an acceptable tenant. You will need to do a background/credit check on them.

Once they are approved - you will need to draft up a lease agreement(recommend to have an attorney draft it or atleast review it).
Provide your tenant with a method to pay the rent. If they do not pay the rent - be prepared to evict them. Hopefully it doesn't come to that.
Depending if you will self-manage or have a property management company - you or the property management company will have to fix any issues with the house.

Rinse/Repeat

Good luck with your investing - I am also a NYC resident investing in PA.
[email protected]917-280-8544
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Eric DeVito
OP
Staten Island, NY · Member since 2015 · 265 posts · 59 votes
8y
@Brian Adzadi Lehigh Valley area. Allentown, Bethlhelm & Easton. Looking in those areas. Mainly 2-4 unit family. Using a HELOC for downpayment.
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Eric DeVito
OP
Staten Island, NY · Member since 2015 · 265 posts · 59 votes
8y
@Basit Siddiqi Thanks for the tips. Yes it is a little nerve racking because I've never done any of those things you mentioned before. I am just afraid that I wont be able to find a tenant myself and that I will dig myself into a hole paying off that monthly payment with no tenant in place.
That being said any recommendations on method of payment? Also where to get the background/credit check done?
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Basit SiddiqiBusiness Member
Accountant · New York, NY · Member since 2015 · 8k+ posts · 3k+ votes
8y
@Eric DeVito
Payment methods
1. Check/money order/cashier's check to your home/office/po box
2. Use a website that accepts payments from tenant. No fee for tenant if payments are through checking account; Fee for tenant if payments are through credit card.
3. Provide them your checking account number and tell them to deposit with a deposit slip at bank
Background/credit check - I don't have any recommendations. You can possibly do a quick search on this site for a list and recommendations.
I think they range from $25 to $50 in cost depending on what you want included in the report.
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Eric DeVito
OP
Staten Island, NY · Member since 2015 · 265 posts · 59 votes
8y
@Basit Siddiqi thanks for the options on payments. I feel like direct deposit to my checking would be best. My only issue with those options is what if the tenant tries to play games? They say they sent the money and its not their fault I did not get the money. Stuff like that is what concerns me.
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Basit SiddiqiBusiness Member
Accountant · New York, NY · Member since 2015 · 8k+ posts · 3k+ votes
8y
You can tell them to keep a copy of the deposit receipt as proof of payment.
Tell them to show it to you if he plays games.
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Brian Adzadi
Allentown, PA · Member since 2016 · 515 posts · 404 votes
8y
@Eric DeVito
Welcome to the Lehigh Valley Area. @Basit Siddiqi is a property owner in the Allentown area and so am I. I own my primary residence here in the Allentown area but work in Brooklyn. I own a rental in the Allentown area as well. Basit works and lives in NYC but own a rental in Allentown. So you two may have a lot in common and can give you some more tips. For real estate questions and market analysis you can contact @Justin Brown to give you some incite.
Don't be afraid about not finding a tenant, I thought that myself as well when I first bought my property but as soon as I put the property for rent on Facebook Marketplace and Craigslist, the calls would not stop.
Key thing I want to know is, are you going to continue living in NYC while you own property in the Lehigh Valley area? If that's the case then you definitely need a property manager.
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Eric DeVito
OP
Staten Island, NY · Member since 2015 · 265 posts · 59 votes
8y
@Brian Adzadi Yes I am going to still be living in Staten Island. About an hour drive to Easton area with no traffic. I work in the city though during week. Basically looking for small multi family. Using HELOC to find down payment. Just trying to acquire as much knowledge as i can to better prepare myself and "calm my nerves down".
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Shawn AckermanPro Member
Real Estate Entrepreneur · Mid West, East Coast · Member since 2015 · 3k+ posts · 1k+ votes
8y
@Eric DeVito be sure to run your number a conservatively. If the deal makes sense with conservative numbers, chances are it is a deal. All the best to you.
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Eric DeVito
OP
Staten Island, NY · Member since 2015 · 265 posts · 59 votes
8y
@Shawn Ackerman Thank you
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Jason Kern
Real Estate Broker · Portland, ME · Member since 2016 · 63 posts · 55 votes
8y
Be careful when you're stepping out and managing yourself. I analyze properties (tons of them that I don't buy) with a property manager expense included. My expertise is not property management but more on analysis of the deal/asset. I made a very conscious decision to operate with a property manager. Consider what you want to be dealing with day in and day out. If you're skilled with managing property or developing that aspect of yourself you'll save yourself the property manager expenses. If you want to focus on finding deals that create income then consider that your focus. They're very different skills and will create a very different day to day life.
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Jim Sims
Investor · Salem, OR · Member since 2017 · 8 posts · 5 votes
8y
I did tenant screening through my state's rental housing association. Looks like PA has one too: http://www.proassoc.org/
Here's another one that screens and has forms you can use: http://www.landlordassocpa.com/
I found these professional associations to be worth the (tax deductible) expense. Using professional forms and screening reflects well on you as a landlord. And their newsletters are full of great info...new laws, ads from local contractors, lawyers who cater to landlords, etc.
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Eric DeVito
OP
Staten Island, NY · Member since 2015 · 265 posts · 59 votes
8y
@Jim Sims Great, thanks alot!
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Christine Kankowski
Real Estate Broker · Temecula, CA · Member since 2014 · 992 posts · 782 votes
8y
Please get up to speed on landlord /tenant law and fair housing guidelines. You need to know the answers to questions such as - do you accept comfort animals? Do you have set credit requirements? do you accept section 8? What repairs are covered by landlord?
Can I have a waterbed? aquarium? Trampoline? How many pets? Do you have restrictions on pets? How much of a deposit do you charge?
Who will take care of repairs if you are an hour away? How will you advertise and get on all the sites- do not rely only on Craigslist
If this is the first time you have rented a property, I recommend going with a property mgmt company - You will see what leases, addendums, inspections they do etc
Best of luck!
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Varun Parkash
Jersey City, NJ · Member since 2017 · 124 posts · 13 votes
8y
I own out-of-state properties and you shall provide your tenants with the following:
1. HOA CC&R
2. Handymen number for your complex - condo
3. Your direct number and email of course
4. Copy of water bill (one to you) and the other to the tenant - Register the tenant with the water-bill utilities management company - city rules often put the burden of water bills to be paid on landlord if tenants do not, the landlord is ultimately responsible to pay it.
5. Keep copies of lease secure and use addendums to renew it every year if you get long-term tenants
Be friendly, have a thick skin and enjoy being a landlord.
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Eric DeVito
OP
Staten Island, NY · Member since 2015 · 265 posts · 59 votes
8y
@Varun Parkash & @Christine Kankowski thanks for the tips. I understand I have to have set standards/rules when it comes to renting my units out. Where do you get these leases and addendums? Any outlines that are already premade or you wrote up your own?
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Varun Parkash
Jersey City, NJ · Member since 2017 · 124 posts · 13 votes
8y
Originally posted by @Eric DeVito:

@Varun Parkash & @Christine Kankowski thanks for the tips. I understand I have to have set standards/rules when it comes to renting my units out. Where do you get these leases and addendums? Any outlines that are already premade or you wrote up your own?
Hi Eric, i hired an agent to get my out-of-state property rented out, so she had them (standard leasing document - differs from state to state). I heard that you should be able to get them from local office-depot for like $20-30 bucks or they might even be available online. It's mostly premade and you add-up your own points such as "refrigerator - ice cube holder trays to be returned in the same condition as they were originally, tenant expected to pay for carpet cleaning costs, security deposit paid amounts and date, number of keys provided to tenants, rent payment deadline etc"
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Eric DeVito
OP
Staten Island, NY · Member since 2015 · 265 posts · 59 votes
8y
@Varun Parkash I see, I suppose my realtor would be a good person to ask for help with this. I am sure he would have knowledge in this area and could give me some guidance as well.
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Jared Kulp
Ottsville, PA · Member since 2015 · 17 posts · 2 votes
8y
Hi Eric,
I would encourage you to find a good real estate agent to help the first time around. We bought out first property a year ago and after fixing it we posted it for rent. I was overwhelmed by the response and enlisted our agent to help us lease the property. It was the best decision we made. She had the experience, we did not, and helped us pick a good tenant. It cost first month's rent but she provided the lease which was fine with us. She also had the time to show it when we were limited to after work. All in all I would do it again. Good luck!
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Jay Helms
Rental Property Investor · Gulf Breeze, FL · Member since 2014 · 1k+ posts · 733 votes
8y
Originally posted by @Eric DeVito:
Hello all, I know the basics already that I need to secure financing, get pre-approved for a loan, do my analysis on some properties I am interested in and of course find a realtor and just check out some homes. Now say that I do find a property that I close on, what inital steps should I take as a landlord/investor. Btw I will be investing about 1 hour away from my home. I live in NYC, but I am going to invest in Pennsylvania. What is the admin side of things that I should keep in regards to records/documents? Also what documents should I be giving to tenants whether they are already there or I have to find new ones?
What are your goals? By reading between the lines of your original questions, sounds like you’re an aspiring property manager, not an investor. But that all depends on your goals. At any rate you definitely need to build a roster for your team.
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Eric DeVito
OP
Staten Island, NY · Member since 2015 · 265 posts · 59 votes
8y
@Jay Helms Both? I will still account for prop. Management fees when running my numbers just Incase I do go with a prop. manager. If I try and learn to landlord my own property I will be saving money monthly. Yes I have to learn the process. Live and learn I suppose
1 Reply
Chris K.
Attorney · Nashville, TN · Member since 2015 · 1k+ posts · 1k+ votes
8y
@Eric DeVito
As an out-of-town owner, look into the local ordinances to see if you are even allowed to manage the property yourself. Depending on the municipality, you may actually need to hire a management company. With some ordinances, you could get away with having a local contact. But other ordinances make it clear that you must have a proper property manager.
There are 100s of other issues. But that's probably the most important question to figure out.
Disclaimer: While I’m an attorney licensed to practice in PA, I’m not your attorney. What I wrote above does not create an attorney/client relationship between us. I wrote the above for informational purposes. Do not rely on it for legal advice. Always consult with your attorney before you rely on the above information.
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Megan Phillips
Rental Property Investor · VT · Member since 2017 · 233 posts · 147 votes
8y
I am reading Brandon Turner's "Book on Managing Rental Properties" -- it gives you tons of extras like lease forms and other documents, as well as recommendations for background checks, etc. I plan on using the lease provided from that book, plus the book is just great for the beginner investor. I am closing on my first property next month, the book has taken a lot of the "fear" out of the process because the more you know, the better prepared you can be. The more emotion you can take out of the process, the better. It's a business.
My process for 1st purchase:
-Got pre-approved
-Got a realtor/looked at places, and also analyzed almost all multis for sale in the area (over 3-4 months)
-Contacted local investors I found on BP to ask questions along the way
-Made some offers
-After getting an offer accepted - my realtor and lender kind of lead the way as far as making sure things are done as they should be, I just had to read the contract and sign on the dotted lines, then reviewed all of the disclosure reports and did the inspections, etc, and got an attorney to do title search and close (they also reviewed my lease) and then wait for the closing date, as well as the Fire Marshal and septic inspection (seller is in charge of this).
-I also created an LLC during the process via the attorney (to my understanding banks don't always allow sales under LLC's, mine does -- if it didn't, I would Warranty Deed the property into my name after sale was complete)
-This property has tenants until May, so I'm not worried about finding tenants immediately
-Cross fingers and hold on.
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Eric DeVito
OP
Staten Island, NY · Member since 2015 · 265 posts · 59 votes
8y
@Megan Phillips Thanms you and congrats! Excellent break down of the process. I do indeed have. At book, put it aside but I have to get back to reading it. I’m sure if would help greatly.
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