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Thinking about becoming a New York landlord? Getting a handle on net rents and cap rates is helpful, but it won’t keep you from making the mistakes that trip up newbie landlords time and again.
“Short of having a large network of friends or family to turn to for advice, first-time landlords are stuck trying to figure everything out on their own; contracts, violations, deadlines, court proceedings, laws, regulations… the list goes on and on. In the end, a lot of time is wasted trolling through government sites and countless dollars spent paying experts for answers to quick, simple questions,” says J’Nell Simmons, the executive director of LandlordsNY, a free peer-to-peer and expert advice and resource network for professional New York landlords.
Simmons asked LandlordsNY members to share the biggest bumps on their learning curves. Here’s what they said:
1. Not hiring a superintendent
Looking to save money, new landlords often forgo hiring a part-time super, thinking they can probably just get a handyman or industry-specific contractor—such as a plumber, electrician, or painter--or even do things themselves.
“Hiring a good super is crucial for more than just repairs,” says Simmons. “Tenants have a person with whom they are familiar and trust to come into their apartments and do work as needed. There is a person that is responsible for the general upkeep of the building or property and will maintain its cleanliness too. Finally, and maybe most importantly, a super acts as the owner’s ‘eyes and ears’ on the property, especially when the landlord can’t come around often. This is invaluable.”
2. Spotty record keeping
This is a lesson in smooth management—and preparing for the worst.
“One of the most important things for a new landlord to be prepared for is that one unfortunate day you may have to evict a tenant or take them to court for another reason,” says Simmons. “When you get there, you better have all your information and documents in order otherwise you don't stand a chance in court.”
Landlords should track everything--from critical items like leases, rents, important dates, and correspondence with tenants and vendors to seemingly unimportant ones like paint colors.
To do this, you’ll need to choose—and use from day one--a good management and accounting software.
“LandlordsNY members use everything from AppFolio, Yardi, MDS, MRI, and Realty Information Systems to customized Excel spreadsheets,” says Simmons. “There are also services out there that cater to specific aspects of running properties that can be very useful, like Empower NY, which tracks violations in the various NYC agencies. “
3. Not having the right insurance
For starters, you’ll need liability and property insurance.
“Make sure you use an insurance broker whose guidance you trust,” advises Simmons. “Also, as a new landlord, make sure your tenants get renter's insurance. You don't want to get caught footing the bill for an incident that happened inside their apartment and that was their fault.”
4. Doing major work without permits
“The NYC Department of Buildings has been cracking down, so make sure you know all the codes before you do renovations,” says Simmons. “It’s not worth getting caught and paying very heavy fines and dealing with stop work orders.”
If you are doing exterior work like brick painting, for example, you must file for a permit for a scaffold, depending on the size of the property.
As a service to members of LandlordsNY, notes Simmons, buildings and architecture expert Crown Design and Consulting keeps landlords up to date with important information about permits and the permitting process and is available to answer members’ questions for free at any time.
5. Treating a good tenant poorly over small things
“New landlords sometimes overlook the value of a ‘good’ tenant,” says Simmons. “A good tenant is someone that (a) pays on time every month and is rarely late, (b) rarely complains, and (c) doesn’t call the city and complain about you every day.”
When a good tenant asks for a few dollars off to help buy a new microwave because your outlet blew and broke their microwave, “don't fight them--it's not worth it,” says Simmons. “Or if one day the tenant calls and asks if you can send an exterminator to check for roaches, even though the exterminator came two weeks ago and it will cost you $50, send an exterminator.”
6. Not lining up a good landlord-tenant attorney
Inevitably, you will one day need a lawyer.
“Make sure you pick a landlord-tenant attorney that you trust and can talk to—and use them!” says Simmons. LandlordsNYmembers can get free legal advice from landlord-tenant law expert Itkowitz PLLC.
7. Not seeking advice or reaching out to learn from other landlords’ experiences
“Many first time landlords have no one to turn to who they feel close enough with to discuss their issues,” says Simmons. “Anyone else who can offer help usually costs a lot of money--and first-time landlords understandably want to save, not spend!”
LandlordsNY, which is free to professional landlords, is based on the notion that for every landlord scratching his or her head over a problem, there is another who has experienced the same problem and has the solution.
“In our online discussion rooms, members confidentially connect and help each other with issues like how much to increase rent, destabilization, late fees, security deposits, and pretty much any topic that you can imagine,” says Simmons. “We also have a team of experts—including legal, violations, energy, loan, architecture, and expediting--who are available at any time to answer member questions at no charge within four business hours.”
LandlordsNY is the first social network exclusively for landlords and property managers. New York landlords and managers enjoy a variety of free tools, resources and services including the ability to ask questions of top industry experts, search for and obtain inquiries from qualified vendors, and most importantly, learn from each other. LandlordsNY is completely FREE to anyone who owns or manages property as a business in New York.