Being a first-time property manager in New York City is no easy task. Read on for tips on how to successfuly navigate unique challenges you may face.
Rental pricing
Compare the prices of the rentals in your area. This will give you a good idea of what to charge as a first time property manager. It's important that your price reflects the features that would make your property more attractive to a potential buyer, such as a swimming pool, laundry room, walk-in pantry, etc.
One of the common mistakes landlords make is charging too much rent and then being forced to reduce the price if they can't find suitable tenants. By setting a reasonable price, you can decrease the vacancy period of your property and attract a good tenant.
Picking the right tenants
Choosing the right tenant in NYC is a significant task because a non-qualifying tenant could cost you more than a couple of months of vacancy. Your vetting process should involve a thorough background check. Some of the points you need to consider are employment history, evictions, criminal records, previous property damage, tax liens, or a trail of unpaid bills. These factors reveal things about the temperament of the prospective tenants. If there is a large outstanding tax lien or judgment, the individual's ability to pay rent may be impaired.
Learn the rules and regulations of New York state
To avoid any problems with tenants, equip yourself with the NYC property management tenant rules and regulations to protect you from any damages. The primary regulation you need to implement is that there is no delay in rent payment or agree to a payment plan. For example, you could agree to give the tenant a grace period, meaning you will not charge the tenant a late fee or take steps toward eviction for a set number of days after rent is due. The tenant would have then have that time to pay rent without a penalty.
Have a written rental agreement or a legal contract as per NYC federal and local laws. Having a well-written tenant contract is ideal for communicating your desires and protecting yourself in any legitimate circumstances.
Avoid gaps in homeowners insurance by requiring renters insurance
You will need to adjust your apartment insurance to show that the property is now rented out and choose to insure the purchase price or the total replacement value, which is the cost to rebuild the home if there is a total loss. Also, you may want to ask your tenant to take out a renters insurance policy. Your tenant's contents and liability will not be covered under your policy.
Have a strict policy about maintenance
It's good to have a clear understanding of the repairs for which you are responsible. If something breaks as a matter of regular usage, you are responsible for replacement. If the tenant caused the damage and it is not due to normal wear and tear, you may charge them for it. Legally, you're also required to offer the tenant a single phone number they can call for repairs, questions, emergencies, etc.
Be clear about expectations for covering electricity, gas, water, sewer, trash pickup, and other utilities.
Consider hiring a property manager company
If you're holding a second job as a landlord in NYC, or live far from the property, you may want to hire a property management company. A property manager company will usually charge anywhere from 8%-12% of the monthly rental value, depending on where your property is situated. In exchange, they will handle everything related to the rental property's day-to-day upkeep, which includes tenant complaints, rent collection, evictions, and ongoing maintenance.
Secure your rent roll
Want to mitigate your risk of rental income loss as a result of default, vacancies, lease breaks, holdovers, damages, and more? Click here to learn more about the insurance products offered by TheGuarantors, which help increase accessibility and affordability for renters who may otherwise not qualify for the apartments of their choice, while mitigating your risk of rental income loss. All at no increase to your operating expenses.
Other important tips
Inspect the apartment when a tenant moves out before the next tenants move in.
Maintain excellent tenant relations. Don't overly befriend your tenants; it's a business relationship.
Don't have a "No Pets" policy - You will alienate 25% of the market if you do. You can charge more if tenants move in with pets and change the carpets in a few years.