What does it mean to be a landlord? This title comes with different definitions for different people, depending on how you approach the management of your property and what kind of experience you have with leasing and maintenance. Some landlords are extremely hands-on. They want to maintain complete control of their property. They might even do the maintenance themselves. Others take a more hands-off approach, and leave the heavy lifting to an experienced professional management company so they can focus on other things. Renting out a Philadelphia property can be a lucrative endeavor for owners who want to earn consistent rental income while their asset grows in value. But, it's not for everyone. Landlords must be patient. They must be willing to invest resources in their rental properties. If you're managing on your own, you'll need the temperament to manage your tenant relationships as well as their complaints and conflicts. If you're hiring a property manager, you'll have to trust them to make the best decisions for your investment. If you're asking yourself whether you're ready to become a landlord in Philadelphia, we have a brief list of things you should consider.
Do You Understand the Philadelphia Rental Market?
Renting out a home without paying attention to rental values, occupancy rates, tenant demographics, and market trends is a dangerous game. If you're going to be a landlord, you need to understand:
- What tenants are looking for when they rent a home.
- How much your particular property can earn on the market.
- All the renovations and upgrades that may be necessary before you rent out the property.
- Where you'll need to market your property and how you'll screen your tenants.
All of this is part of market knowledge. If you don't have the experience and the understanding that's required, it's possible you're not ready to be a landlord. Gather the expertise and the education you need before you start renting out a property.
Your Rental Property is a Business
Can you think about your rental property as a small business? You need to. Real estate can sometimes be emotional. We're talking about homes; houses and apartments and condos and buildings where lives are lived. If you're renting out a home that you grew up in or a property that you lived in yourself before you got married or moved away or had children, renting it out to tenants you don't know might be especially emotional for you. They're not going to love it like you love it. Make peace with that. Someone else will be living there, and that's okay. If you find you cannot make peace with that, you are probably not at a point where you can be an effective landlord. Once you rent out a property, it becomes an income-producing business. You'll have to make business decisions based on data, laws, and results. You cannot become emotionally involved with your tenants or attached to the property. This is not always as easy. What if rent is late or an expensive repair is needed or the tenants are complaining and threatening you with a lawsuit? Can you remain professional and objective?
How Available Can You Be to Your Tenants?
Unless you're working with a Philadelphia property manager, you'll be the point of contact for your tenants. That's a full-time commitment. As you prepare yourself to be a landlord, think about how you'll cover all 24 hours in a day. If something goes wrong or there's an emergency at the property, you'll need to be responsive. Tenants will need access to you at all times. If you're not available, someone else has to be. Do you know who that will be? Not only do you have to be available; you have to be resourceful. You'll need a team of vendors and contractors who can respond to those maintenance issues. You'll need cleaning crews and painters who can help you between tenants, during turnover periods. While we're on the topic of maintenance, can you assemble a team? Maintenance and repairs will be necessary at some point, even if your property is already in great condition. You'll need a list of preferred vendors and contractors.
- Do you know plumbers, roofers, HVAC technicians, electricians, cleaners, and landscapers?
- Can you count on them to give you their best rates?
You're ready to be a landlord if you answered yes to those questions and if you have a maintenance budget, a maintenance reserve, and a plan for seasonal and preventative maintenance.
Do You Understand State and Federal Rental Laws?
Before you become a landlord, you need to familiarize yourself with some of the most basic rental laws that protect tenants. The most important law you need to know is the federal Fair Housing Act, which protects tenants from discrimination. Pennsylvania also has a Landlord Tenant Act, which you should review so you understand the requirements and the mandates pertaining to discrimination, lease agreements, rental increases, evictions, habitability requirements, security deposits, and other issues. It's easy to make an expensive legal mistake. Make sure you can stay up to date on all the legal requirements and changes, otherwise you're taking on a lot of risk and liability.
Philadelphia Property Management
Ultimately, it might be better to work with a Philadelphia property manager, even if you determine you are ready to be a landlord. You'll find you can earn more and spend less on your investment when you're working with an experienced professional who already has the necessary systems and resources in place. Philadelphia property management companies study the market daily. That provides a competitive advantage when it comes to assigning rental values to homes. Get to know the market so you can price your property accurately. Otherwise, you might face longer vacancies because your price is too high. Let us help! Please contact us at Innovate Realty. We work with investors of all experience levels in the greater Philadelphia metro area as well as surrounding suburban areas in Montgomery, Chester, Burlington, and Delaware County, to the Delaware River.
