Rental Property Investor · Philadelphia, PA · Member since 2016 · 55 posts · 31 votes
Hi, I've been looking around online for the proper steps to becoming a landlord in Philadelphia. But no one has laid them out in steps. I'm focused towards the legal side of things regarding setting up a EIN and getting the tenants names on the utilities they pay. As well as things regarding licenses I may need before moving in a tenant. Can anyone help?
Investor · Philadelphia, PA · Member since 2014 · 351 posts · 80 votes
9y
There are a few things that you would need to do
In Philly, you have to get a renter's license from L&I (It's usually $50/unit/year)
An EIN Number is also simple (And free) Apply on the IRS website: https://www.irs.gov/businesses/small-businesses-self-employed/apply-for-an-employer-identification-number-ein-online
Utilities: Water is typically paid by landlord, Electric and gas can be put in the Tenants name. Also, the gas company has a Landlord coop program to protect you from liens if the tenant does not pay.
Investor · Philadelphia, PA · Member since 2014 · 351 posts · 80 votes
9y
There are a few things that you would need to do
In Philly, you have to get a renter's license from L&I (It's usually $50/unit/year)
An EIN Number is also simple (And free) Apply on the IRS website: https://www.irs.gov/businesses/small-businesses-self-employed/apply-for-an-employer-identification-number-ein-online
Utilities: Water is typically paid by landlord, Electric and gas can be put in the Tenants name. Also, the gas company has a Landlord coop program to protect you from liens if the tenant does not pay.
Rental Property Investor · Philadelphia, PA · Member since 2016 · 55 posts · 31 votes
9y
Thanks Ryan, this helps a lot. I've did some research and it looks like I don't need to get and EIN unless the property is under a LLC (I plan on using sole proprietor for my first property). Are there any other things I might need as far as licensing and forms from the city?
Investor · Philadelphia, PA · Member since 2014 · 351 posts · 80 votes
9y
I'm not sure if you'd need a commercial business license (Formally known in Philly as a business privilege license) as a sole proprietorship. But as part of getting 'it' done right the first time, I'd at least ask around to find out.
Rental Property Investor · Phila, PA · Member since 2015 · 276 posts · 111 votes
9y
you will need a business privilege license to conduct business in philly including renting your property. Run a search at philly.gov on rental license or renting a residential property. There was a write up of what was needed and links to appropriate forms.
For my SFD, the tenant pays water/sewer, electric, and gas which includes the heat. In order to be eligible for the gas co-op program, you will also be required to join HAPCO, a landlord organization and agree to providing access to property when the gas company requests access. Many moons ago, the water company had a similar landlord program. At that time, at most they would let us know that the tenant had an overdue balance of $.02. The other time they communicated to us that there was A big jump in water usage from previous months usage. We had the tenant check the basement toilet which was dripping.
I used a std commonwealth lease and just added things that specifically applied to my needs. My lease states that the tenant is responsible for utilities and they have X-number of days after signing lease, to get the utilities changed to tenant name. The water bill takes a few months to change over the name, so the bill currently comes to the us and the tenant pays it.
My lease also states the tenant is responsible for maintaining the small front yard. (During the interview process, I found out that the prospective tenant grew up helping her parent maintain a community garden). Tenant also has the responsibility of shoveling the outdoor steps and sidewalks. The addendum also states that any private or municipal fines is totally their responsibility. In our neck of the City, recently they have been fining: not shoveling your sidewalks within X-number of hours to snow stops, also co-mingling ur trash with re-cycles (they include photos), dumping anywhere on your property they assume it's you, and now they ticket for putting ur trash out too early. If you have more than the allotted number of trash bags on trash day, that can be an issue too.
Whatever I wanted or felt I needed to expound on something in the canned lease, I added an addendums. Your lease is your strongest support so some significant time updating it to include what is important. Whenever a question is asked, the first thought should be 'what does the lease say.'
Rental Property Investor · Philadelphia, PA · Member since 2016 · 55 posts · 31 votes
9y
@Mags S. Thank You, The information you provided was very helpful. Right now I'm in the process of finding out the legal side of real estate investing. If you have any other insight of the land lording responsibilities before moving a tenant in please share.
Rental Property Investor · Phila, PA · Member since 2015 · 276 posts · 111 votes
9y
@Andres Perez - Ooops! That site is prolly phila.gov. Can always call 311, they use knowledge databases so can give you the same info. Just plan to spend a morning at city services to take care of it all.