I am currently seeking a 1-4 unit multi family property in Philadelphia. I have been analyzing many properties to find one that fits my criteria. I am finding there are some expenses associated with being a landlord in Philadelphia that may not apply to other locations. Some of those expenses being a Rental License $50 per unit annually, Fire Alarm License/ Certification $225 plus monthly monitoring fees, Certificate of Rental Suitability $25, Business Privilege License $300 per entity.
Correct me if I am mistaken on the fees I have discussed. What other expenses are Philadelphia Landlords paying that would be helpful to know when analyzing potential deals?
certificate of rental suitability is free. All the others seem right except fire alarm cert. I dont know about that one.
As @Donnell Evans mentioned certificate of rental suitability is free.
Rental license is $55 a year per unit.
Commercial Activity License (aka Business Privilege License) is free. It used to be $300 a few years ago no it's free. https://business.phila.gov/commercial-activity-license-city-of-philadelphia-tax-id/
Fire Alarm inspection price is vary depends on the company and the size of the building/alarm system. But ballpark is about $300 a year. Plus $6 for a tag per fire extinguisher.
@Yuriy Skripnichenko doesn't the fire alarm inspection only apply to 4 units or more? I think you can have 1-3 units and not require the alarm system or inspection, if I'm not mistaken.
You have to have a fire alarm in any 3 or more units building. And have to perform annual fire alarm inspection as well as tag all the required fire extinguishers
What about House Meter for electric? That's another ~$30 a month.
You've also got the commercial fee for trash hauling at $300 per year.
Separate meter for common areas required only if it's 3-units and more and if you actually have common area (shared entrance). I have properties with 3-units and each unit has it's own entrance so I do not have a common electric for the property. But if you do, you are on point. I usually pay $27-$31 for common space
Philadelphia taxes just keep going up and up, outpacing rental increases- Its getting harder to cashflow.
Another expense arises from the new lead law for rentals - you will have to be lead safe even when no children reside in any units, so the cost of essentially painting and cleaning plus the testing have to be considered. How well the paint encapsulates the lead would determine how often repainting will be needed.
And the new bedbug regulation puts the costs on the landlord to deal with that. OK, the tenant might have to share in the costs - but if there were no bedbugs to start with, then the tenant is very likely responsible for any being there (assuming no contractor or landlord visits are to blame).