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For almost every New Yorker, renting your first apartment is a rite of passage. Stay long enough in the city, and there may come a time when you switch sides from tenant to landlord. Whether you’re the owner or subletting here are some tips to get you started with being a landlord in NYC.
Image by Vivienne Gucwa / Flickr
1. Know the rules
The first thing you’ll need to do is get approval from someone. This could be the board, your landlord or the management company and you’ll need to know the building’s rules as they can change from one to another.
A condo board has the right of refusal to rent the unit, meaning if they reject your proposed tenant they have to match your price. However, this rarely happens, most boards don’t care about the tenant so long as the basic requirements are met.
Co-ops, on the other hand, are far more active with vetting prospective tenants and have the right to accept or refuse without any explanation. They also tend to limit the length of the sublease and the number of times you can sublet. Co-ops also typically charge the owner a sublet fee, usually a percentage of the gross monthly rental or profit.
2. Screen your tenants
Once you’ve attained permission as a rental housing provider and decided on a price, next comes finding the right tenants. The success of your market venture depends to a great extent on the tenants you choose and the best way to find good tenants is by using good screening practices.
Carefully look through every tenant application, paying close attention to credit report, criminal history, and eviction reports. You can run a credit check through a screening service like Experian, the tenant pays the $15 fee.
It’s also good to ask for past landlord references, job references and anything else that can prove the quality of the tenant and their ability to meet the monthly payments.
3. Hold up your end of the deal
One of the biggest mistakes first-time landlords make is not understanding their full responsibilities. This should be made clear in the lease, stating which repairs you, as the owner, are responsible for both physically and financially.
If you’re a co-op or condo owner, you are responsible for ensuring all systems and amenities are functioning, such as gas, electricity, smoke detectors, etc. To better understand your responsibilities as a landlord read up on the New York State attorney general tenants’ rights guide.
4. Have a reserve fund
Your motto should always be “Hope for the best but plan for the worst.” Make sure you have a reserve fund for both planned and unplanned maintenance. Even if the damage was caused by your tenant, you might still have to pay out-of-pocket expenses.
5. Set up an easy rent collections method
Lastly, ensure you have a smooth rent collection method that works for both you and your tenant. These days it’s effortless to collect rent through online services such as PayPal, SquareCash or just a good old bank transfer.