Hey everyone! There are a ton of posts on BP about how to find and buy your first property. I am now a few hours away from actually closing on my first deal and I just realized I have no idea what my next steps are for immediately after closing. I know I need to have the property tax adjusted, I need to switch over the utilities that are in the current owners name. I need to send the tenants a letter stating that I am the new owner and to send me their rents. What else? Should I go introduce myself to the tenants? If anyone could give me a little check list I would greatly appreciate it because my nerves are going crazy. Thanks!!
Make sure the seller brings the security deposits money to closing. He/She should have this money and your tenants will expect it when they move out.
I know in MD, within a certain time-span after closing, you can appeal your property tax assessment. If this is what you're talking about, just draft up a letter and propose your new number. Include data on how you came to that number (comps, recent sales, neighboring properties' current tax assessments).
If any tenants are only month-to-month, I would suggest you go ahead and have them sign a new lease. Make it any length you want. Month-to-month? Year? Your call.
If you'll be managing the property, then yeah, it'd probably be a good idea to introduce yourself at some point. You could do it in person, or just send a short professional letter. And yes, tell them where to send rent payments. If you don't want it mailed, offer other ways to pay such as online. Or if your tenants are the cash-only crowd, see if PayNearMe service is available in your area.
@Tommy DeSalvo Relax
I totally agree regarding security deposit on your closing documents.
( exception REO or city own properties )
-> Maybe create a checklist of immediate repairs.
-> Make sure you have contact telephone numbers for property utilities.
-> Lastly, maybe create a BP thread with numbers and pics of your new purchase.
@Tommy DeSalvo , I agree with what @Nicole W. advised with one exception. She recommends having any month-to-month tenants sign new leases. You should run a background check on all tenants (at your own expense) before you re-sign any leases. You want to make sure you aren't locked into problems.
@Jenkins Ramon suggested making a checklist of immediate repairs. Ask the tenants if there is anything broken in their units. Anything that leaks, etc. You want to start off on the right foot by fixing any deferred maintenance issues there may be. Ask them for contact information and how they wish to be contacted - don't rely on the seller to have the best contact information for the tenants.
Oh yes, background checks would be a good idea. I guess I just suggested month-to-month so that while they'd be under his own lease, he could basically end the lease quickly if needed.
Make sure you get the prorated rents at closing too!
I usually leave a letter for each tenant during the final walk through- who we are, that we now own the house, where to send rent and how to get a hold of us if there is an issue. I also state what their rent is and the amount of the security deposit along with where it will be held (state law here) just so everyone is on the same page. Let them know you will honor their existing lease. If you have any upgrades planned, let them know about that too.
If they are month to month, get them to sign your own lease- I would suggest month to month again until you know that you want them there longer. For longer leases, wait and see how they are before you offer a new lease, make sure to get an application from each adult and I pay the background check fee for existing tenants (anyone on the lease) as a gesture of good will- not their fault the building was sold. Give them a date you need to be notified by- I like to have at least 2 months notice or more if possible so I can start marketing the upcoming vacancy.
Congrats @Tommy DeSalvo ! A lot of good advice here already, so I just have a couple things to add. Don't stress about trying to get everything done within the first week. Take your time and figure out what is immediate and what can be done weeks and months later. Immediate things would be utilities and letting the tenants know to pay you and contact you for maintenance concerns. Most other things aren't as urgent.
For tenants that aren't on month-to-month, I recommend making a formal lease addendum for any changes that need to be made to their lease, such as who to make payments to, and what methods of payment are accepted by you if that needs to change. That way everything is in writing and signed.
Also, if you are paying the water bill, I recommend looking into Guardian Water & Power's submetering service. If you have the water lines separated for each unit, and put on a submeter, they will read the meter each month and send water bills to each tenant. The tenant will then pay you their water bill in addition to their rent, and you will then pay the water company when they bill you. Then when the leases are up, you can make the tenant responsible for water. In my opinion, you want to pass on as much to the tenant as possible so they are less wasteful and can choose to control their expenses.
Good luck, and feel free to reach out with any questions you may have.
@Tommy DeSalvo Congrats! You are a step or two ahead of me; I made offers on 3 properties today and hope they are all accepted .... oops, what have I done, now what?!?! Glad you asked the questions. Thanks to all the BP members who answered your question, and gave you good advice (some I knew, but some I had not thought of). I love BP and its members for their sharing information!
@Margaret B - 3 at one time..Thats aggressive. Lol
@Tommy - Congrats.
Congrats @Tommy DeSalvo ! I'm in the market for another mulit right now, but have yet to pull the trigger.
Everyone's had some great input thus far. I found BP's "Tenant Screening: The Ultimate Guide" very helpful and also the site MySmartmove.com for background and credit checks.
Best of luck!
Hey everyone! Thanks for the awesome and quick replies! Yesterday was a whirlwind of craziness and excitement and I just unplugged and relaxed after the closing. I just ordered the everything landlord legal guide because it seems to come with a nice amount of forms and state laws built into it. I just finished my introduction to the tenants letter and I'll be heading over there in a few to meet tenants and hand out the letter. It lets them know that within the next week, while I'm honoring their current lease, I'm amending where rents go, contact info, etc.
Utilities have been successfully switched over.
@Coleman Nelson - I'll look into sub-metering. It sounds like a cool idea. I just need to run the numbers and see how best to balance either raising rents, sub-metering, etc so that I can keep a high occupancy rate while also competing with other apartments in the area.
I plan on running background checks on everyone. There are currently two tenants on month to month leases. One has been there for 6ish years. And the other is moving out in a month (I'm owner occupying and the tenant just married and they're getting a bigger place) The other two have leases locked in til random times next year.
@Jenkins Ramon -As soon as I finish up with everything today I'll try and make a post with photos and the numbers.
sounds good @Tommy DeSalvo
On a practical note, I am sure you were handed a ring of keys at closing which may or may not be properly labelled. I strongly recommend going to LandlordLocks dot com and getting new locks for all of the doors and a master key system.
You can wait until tenant turnover to actually install the locks if you want, but you will find life so much easier when you only have to carry around one key. Once the locks are in place you can replace them in 30 seconds each time you have turn over. You can also use the master key for other buildings as you grow.
I am sure there are alternatives but I have used LL for the last 5 years and enjoy the convenience.
Thanks for the plug Fred! Let me know if I can be of any assistance.
Congrats Tommy. I actually just closed on a triplex here in ohio about 2 weeks ago so I can understand your stress just starting out. I was wondering were you bought the everything landlord legal guide from? Good luck to you
Congrats @Tommy DeSalvo ! I'm local to Cincinnati so I'll be following this thread closely!! Looking forward to those pics too!!
@Ben Meade - I actually just bought it off of Amazon, not the prime day sale, HA. I bought a new copy, so it wasn't the cheapest option possible, but I figured I might as well. The cost difference wasn't that large between new and used.
@Jay J. -Awesome! Great to see you posting. :) I'll have some pictures up soon. No worries.