Finally! I’m going to be a first time landlord...

Multi-Family and Apartment Investing
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Finally! I’m going to be a first time landlord...

David Richard
Member since 2020 · 6 posts · 1 vote

I never thought I would be a home owner... especially since I live in NYC. But a coworker told me about Union City, Nj and it looks like I’ll finally have my first property by the end of the month!

My first two family property is in Union City, NJ. I’m in my 30s and I will be living on one duplex and I’m renting out the other place.

I’m fairly new and I just finished attorney review and locked my rate in at 3.125% with conventional loan. I did put 15% down.

I’ve only been reading about investing property for the last month or so but I’m learning a lot!

Anything I should know about renting a unit out? What I should prepare for? How much savings I should have in case something happens? I’m just absorbing as much information as possible.

Thanks so much!

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Bjorn AhlbladPro Member
Investor · Shelton, WA · Member since 2017 · 6k+ posts · 6k+ votes
6y

Congrats! If you plan to self manage learn as much as you can about tenant screening and the local tenant landlord laws and regs. Find a lease and get familiar with it. Create a screening process and have written selection criteria that you apply evenly to all applicants and stick to it. Learn to say"NO"; Practice! I'd want to have 15k in reserves just in case. Come back and ask if you have questions.

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  • Bjorn AhlbladPro Member
    Investor · Shelton, WA · Member since 2017 · 6k+ posts · 6k+ votes
    6y

    Congrats! If you plan to self manage learn as much as you can about tenant screening and the local tenant landlord laws and regs. Find a lease and get familiar with it. Create a screening process and have written selection criteria that you apply evenly to all applicants and stick to it. Learn to say"NO"; Practice! I'd want to have 15k in reserves just in case. Come back and ask if you have questions.

    1Reply
  • Joyce Tavares
    Real Estate Investor · Hayward, CA · Member since 2015 · 134 posts · 88 votes
    6y

    Congrats!!  Screen, screen, screen.  Make sure they have a good FICO and good references.  Ask to see last two months' bank statements to see if they have enough to easily pay rent.  I HIGHLY recommend purchasing the book:  Landlording: A Handy manual for Scrupulous Landlords and Landladies Who Do It Themselves. By Leigh Robinson.  You can get them used or new on eBay or Amazon...the best investment you will buy, especially starting out, and it is written so you can understand and have some laughs in the meantime.  

    https://smile.amazon.com/Landlording-Handymanual-Scrupulous-Landladies-Themselves/dp/0932956378/ref=sr_1_1?dchild=1&keywords=landlording&qid=1593895999&sr=8-1

    This classic book on managing rental property, widely known among landlords and landladies as their bible, has been in print for thirty-nine years, has sold over 375,000 copies, and has twice been selected as one of the top ten real estate books of the year by nationally syndicated real estate columnist Bob Bruss.

    This latest edition has been thoroughly revised and updated and includes both the eighty-four forms in the previous edition plus TWO new ones. One of the new forms, the Household Pest Control Agreement, puts into words what both landlord and tenant need to understand about their cooperating to deal with household pests, especially bed bugs. The other new form, Automatic Clearing House (ACH) Recurring Payment Authorization, enables tenants to pay their rent through an automated clearing house (ACH), so they needn’t bother writing a paper check every time their rent is due.

    ALSO, new in this 12th edition is a coupon which the first purchaser of the book may use to receive free of charge all of the forms in the back of the book in common computer formats, PLUS a trial version of “Pushbutton Landlording®,” the author’s stand-alone program for handling the tenant and income sides of rental property management.

    Make sure you have a good software program so that you can keep tract of rental income, repairs, etc.  I personally use TENANT FILE and have for years.  There are many good ones out there.  Do your research and so glad you are on BiggerPockets as there are some wonderful landlords here to help you out if you have any questions.  Good luck!  

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  • Evan Polaski
    Cincinnati, OH · Member since 2020 · 4k+ posts · 3k+ votes
    6y

    @David Richard, I am going to third the screening process part. Beyond the legalities of it (having criteria and applying evenly to all tenants), it will also be the way to create or mitigate a lot of headaches. Get a feel for the tenants.  Meet them in person, get references etc.  But, in my 10 years doing this, the tenants that gave me the most headaches, were the ones that gave me headaches in the application/screening portion too.  Lots of questions, requests, etc early on, and they continued to want things throughout their lease (not standard fixes, but adding outlets and lights, wanted me to get the neighbor to stop letting her dogs bark, etc).  

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  • Calvin OzanickBusiness Member
    Property Manager · Janesville, WI · Member since 2017 · 707 posts · 297 votes
    6y

    I typically would tell my clients to bring 10% of the purchase price for reserves. This way you are covered regardless of what breaks down, falls off or shuts down. I would also budget for 25-30% in reserves when you move out and rent out both units. 

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