First Time Baltimore City Landlord - What to do 1st, 2nd & Last!
Rental Property Investor · Waldorf, MD · Member since 2015 · 155 posts · 76 votes
Hello BP Community. I hope to be closing on my first Baltimore City investment property soon. I'm of course overwhelmed by all the various things I need to do get ready for a tenant. I'd like to query the very knowledgeable BP Baltimore community on steps to take as far as inspections, lead certifications, utilities, stuff I'm not even thinking of!, etc. (beyond obviously making repairs). This might include order to events, like call city for inspection last, or perhaps it's best to call first. Any department names you have would help us google numbers or even post them if you have them handy.
I've read many posts in the last few months that touch on some or all of thesee topics but looking to compile a more comprehensive list for me and others investing in Baltimore City. If this already exists somewhere, please do point it out. I searched and didn't find what I've described above. Thanks in advance!
Congratulations @Kim Coleman!
Its up to you but I would recommend doing a vacancy policy for the insurance. It depends on your insurance company but the vacancy and rehab policies are best suited for anything that might happen during the rehab and while its vacant.
You only have to register the property with Maryland but you will need to complete the lead testing first because the lead certificate number is required for "Part C" of the property registration.
Majority of the homes in Baltimore city were built during the time when lead paint was widely used. Over the years when the properties were updated and rehabbed the lead paint was usually just painted over. Because of this it can very difficult hard to get a full lead "Free Certificate". Most of the time unless you completely gut the house to get rid of any surfaces that existed when lead paint was used it will be difficult to get a full lead free certificate. If you continue to paint over the current surfaces the best you will most likely get is a "Full Risk Reduction" lead certificate.
When you choose to complete the lead testing is a strategy onto itself. Some rehabers will prefer to do the lead testing at the beginning to know exactly what they need to fix. Other rehabers will prefer to do the testing at the end after the renovations are completed and just fix anything that comes up.
When I submit the HUD 1 and the memo to the city to get the water changed to my companies name I also ask for the properties' complete billing cycles for the previous 2 years. I do this for two reasons. First if there is any discrepancy with the first water bill I have the bill to show the meter reading dates and consumption rates. Second if there is a drastic change in the water bill i can look back over the history and compare to similar occupancy statuses to determine if there is a problem with the water that we have been unable to detect(ex. leak in the main water line coming to the house from the street(which you would have to pay for)).
This is what I have learned so far in my limited experience. I hope it was helpful. Let me know if you have any other questions.
@Kim Coleman Hi Kim! The very first thing you want to do is register the property with Baltimore City and the state of MD. Baltimore City charges a $500 fine if you wait too long after closing to register. Check with your closing agent - they may register the property for you. Depending on the condition of the property and work that needs to get done, you should probably get electricity turned on with BGE and get a insurance policy for a vacant/under renovation home. Once renovations and such are finished, you would get a lead inspection. A copy of the inspection has to go to the tenants so keep the docs handy. Also remember the inspection is no longer valid if the tenant doesn't move in within 30 days. From there, you will renew your registration with the city annually and need a new lead inspection for each tenant.
Those are a few steps I thought of - best of luck and congrats on your first property!
While I do not have experience as a LL in Baltimoe I do want to congratulate you. I've seen you post on here a lot and you seem very enthusiastic and just know that I and probably many others are rooting for you! Good luck @Kim Coleman!!
Thank you for the response and detailed information @Kyara G.! Those steps don't sound too overwhelming! I reorderd them a bit thinking i want insurance coverage from the moment I buy it. So I'll arrange that prior to closing just as if I was getting a mortgage.
1. Get an insurance policy.
2. Register with Baltimore City
3. Register with Maryland
4. Turn on utilities in my name (they are currently on)
5. Get a lead certification
A few questions on this -
Since repairs are minimal and I hope to have it rented in 30 days do you know if I still need a "vacant" policy specifically?
Am I registering the house as a rental with Baltimore and Maryland? Do they conduct an inspection?
Thank you for the response and detailed information @Kyara G.! Those steps don't sound too overwhelming! I reorderd them a bit thinking i want insurance coverage from the moment I buy it. So I'll arrange that prior to closing just as if I was getting a mortgage.
1. Get an insurance policy.
2. Register with Baltimore City
3. Register with Maryland
4. Turn on utilities in my name (they are currently on)
5. Get a lead certification
A few questions on this -
Since repairs are minimal and I hope to have it rented in 30 days do you know if I still need a "vacant" policy specifically?
Am I registering the house as a rental with Baltimore and Maryland? Do they conduct an inspection?
Your number one is get insurance. Each is different as it applies to your question at the bottom about a vacant policy. Ask when you get quotes.
My rentals are in Montgomery County. We have a county landlord license, a little over $100 a year but no inspection. Section 8 is different on the inspection. The lead certificate is state wide I think. We pay $30 a year for any house built before 1978 and have a lead inspection between tenants.
@Tamara V. and @Emery Green Thank you so much!! This is very exciting and scary time! I really appreciate the connections I'm making on BP, especially for the encouragement!
Congrats @Kim Coleman
@Kim Coleman
Yes - insurance should be done the day of closing or day before. The Baltimore city does not do an inspection. The registration is just so the city knows what homes are vacant and/or rented.
I would still suggest a vacant policy but it is up to you and your insurance agent. Depending on where your property is located, it could take a few weeks to find the right tenant.
Happy investing!
Congratulations @Kim Coleman!
Its up to you but I would recommend doing a vacancy policy for the insurance. It depends on your insurance company but the vacancy and rehab policies are best suited for anything that might happen during the rehab and while its vacant.
You only have to register the property with Maryland but you will need to complete the lead testing first because the lead certificate number is required for "Part C" of the property registration.
Majority of the homes in Baltimore city were built during the time when lead paint was widely used. Over the years when the properties were updated and rehabbed the lead paint was usually just painted over. Because of this it can very difficult hard to get a full lead "Free Certificate". Most of the time unless you completely gut the house to get rid of any surfaces that existed when lead paint was used it will be difficult to get a full lead free certificate. If you continue to paint over the current surfaces the best you will most likely get is a "Full Risk Reduction" lead certificate.
When you choose to complete the lead testing is a strategy onto itself. Some rehabers will prefer to do the lead testing at the beginning to know exactly what they need to fix. Other rehabers will prefer to do the testing at the end after the renovations are completed and just fix anything that comes up.
When I submit the HUD 1 and the memo to the city to get the water changed to my companies name I also ask for the properties' complete billing cycles for the previous 2 years. I do this for two reasons. First if there is any discrepancy with the first water bill I have the bill to show the meter reading dates and consumption rates. Second if there is a drastic change in the water bill i can look back over the history and compare to similar occupancy statuses to determine if there is a problem with the water that we have been unable to detect(ex. leak in the main water line coming to the house from the street(which you would have to pay for)).
This is what I have learned so far in my limited experience. I hope it was helpful. Let me know if you have any other questions.
@Kim Coleman what @Account Closed says is true but I would recommend managing your property yourself while you only have one or two because it provides you with the competency needed to deal with property managers. I would argue that finding a good property manager is just as difficult as finding good contractors. And the logic applies in both situations. Know enough to be dangerous. Know enough to not be taken advantage of. That knowledge will come from being on the front line, taking shots, brushing them off, and keeping it moving.
All of which you have heard here is good stuff. I am a new landlord myself and getting that on the job training that I need to be successful.
I wish you the best!!
Sincerely,
Eric H.
Thanks @Tarrin Lilly
@Joseph England what you've posted is very helpful. Really good to know about doing the lead inspection BEFORE registering with the state of Maryland. I'll be going for the "Full Risk Reduction" lead certificate. Do we as investors simply contact a lead inspector of our choosing? Or does the City/State give us a list of providers? Or have staff for this? Just wondering because I'm new to dealing with lead certs. I like the approach of getting the inspection and fixing what comes up that way I'm not fixing stuff, miss something then have to restart. But I assume there is additional cost (and time) involved for a re-inspection. Which one works for you? REALLY good tip on the water usage history.
@Eric H. Thank you for your perspective as well. I've been thinking similarly. I'm used to managing myself so there's a part of me that wants to keep the control but also I need to make sure I understand the processes and how things work in Baltimore. I don't like the feeling of...."I'm not sure, let me ask my property manager." At the same time, in order for me to scale quickly and not spend my time on non value add activity, I think a property manager will make sense. I just need one accessible and willing to answer all my questions along the way so I can learn the ropes.
I would do a vacant or rehab policy through Foremost as there are several advantages over a builders risk type policy. The builders risk doesn't have liability on it, so your totally exposed in that area, they are primarily insuring the dwelling and contents. The builders risk is also a fully earned premium, so that means if you get the rehab done in just a couple of months and you want to switch to the standard landlord type policy, that's great, but you wont get refund of any of the premium you paid.
If you go with the Foremost Vacant or Rehab type policy then you get liability coverage (don't skimp here) and the minimum earned premium is $250.00, so set it up a monthly basis and then you wont have to pay any more than you use, or a min. of $250.00.
Once the rehab is complete and you have a tenant, then switch the policy over to a standard landlord policy through either Foremost or Farmers Insurance. Farmers owns Foremost. You will also get multi-policy discounts between Farmers and Foremost.
Start the quest for insurance early. Be sure to discuss your needs and the condition of the house with the agent. The agent will need to get pictures and also need to know your time frame until the shell of the home is done. That's the main area of concern for Foremost. He/She will then submit the details to underwriting and get approval to bind even though rehab items are outstanding.
From there, your on your way.
Hi Kim,
For the lead inspection you can hire a state certified inspector. Make sure you have a good one. If you are gutting the house their is a good chance that if you replace the walls enough the place could be lead free or lead limited. Many inspectors have the option for you to go through with this vs a regular lead inspection. If the place is found to be lead free or lead limited you are exempt from future inspections though you will need to annually renew registration with MDE. There is a lot of lead inspectors you want to make sure you have a good one that guides you through the process.
After that you can register with the city.
Once you are ready to rent market the property and when people commit screen hard.
Dont settle for tenants in Baltimore City. Eviction can take 3 months.
Their are many other things to know about utilty transfer and other details I will gladly explain but it would take too long.
I run a property management company and have never had to evict thanks to thorough screening.
Congratulations on getting the property. If you would like to network let me know.
Thanks @Tarrin Lilly
what you've posted is very helpful. Really good to know about doing the lead inspection BEFORE registering with the state of Maryland. I'll be going for the "Full Risk Reduction" lead certificate. Do we as investors simply contact a lead inspector of our choosing? Or does the City/State give us a list of providers? Or have staff for this? Just wondering because I'm new to dealing with lead certs. I like the approach of getting the inspection and fixing what comes up that way I'm not fixing stuff, miss something then have to restart. But I assume there is additional cost (and time) involved for a re-inspection. Which one works for you? REALLY good tip on the water usage history.
Yes you get to choose which lead inspectors you use and I can speak from experience not all lead inspectors are created equal. The first lead inspector I used was horrible and I kept trying different inspectors until I found one that I like.
What works for me is to get the the lead inspection done after the rehab is complete. This works for me because I end up painting and/or replacing every surface in my rehabs anyways and it very rare that anything come up in the inspection. If it does its small and takes a simple touch up which I then send a picture of what was fixed to the inspector to let him know that it was completed(this does not require a re-inspection).
Let me know if you have any other questions.
You register with the City for $30 a year. No inspection required.
If you house has a "Vacant House Notice" You will need to get a "use and occupancy permit" (U&O) before you can rent it. The U&O Permit will require an 1 time inspection. Until you get the U&O, the annual registration fee is an extra $100.
The registration with Maryland is specifically a lead registration with the Md Dept of the Environment. You are required to register and get a lead certificate before you can make your property "Available for rent" I recommend Neil Roseman from LeadProbe. He can explain the choices and requirements of each.
Hello all, thank you so much @Kevin Romines@Tim Jacob @Joseph England and @Ned Carey I've been offline spending my time getting things in order.
@Ned Carey you mention the U&O, seller got one in his name. Do I need to have it switched into my name in order to register with the city?
Your help and guidance is much appreciated!
@Kim Coleman no the use and occupancy permit goes with the property. Once one is issued it is good until for some reason like a vacant house notice it is removed. Most homes get one when they are built and never need another one.