as an out of state investor are there any requirements to be licensed as a landlord in NY state? Specifically looking into properties in Rochester. If I’m working with a PM would I, as an owner, need anything special?
I'm in the NYC metro area, not Rochester but as far as I'm aware there are no state licensing requirements for landlords per se. Property managers should hold a real estate license as they are collecting fees relating to the leasing of real estate.
As a rental property owner you should be more concerned with your property's certificate of occupancy and making sure the building is safe and sanitary. Anyone working on your behalf as a contractor, electrician, real estate agent, or property manager should hold the necessary license.
As a property manager the broker of record has to be on board. REALTORs at my firm may not manage properties without my consent. This is pretty common. Broker's don't want the added E&O liability of agents trying to rent property. Good agents wouldn't bother wasting their time with this is my market anyway, too many homes to sell. Why work for peanuts?
@Kevin Co - it depends on which area you’re in, and there are things behind licensure which need to be considered.
For instance, in Buffalo, if you own a multifamily(anything 2 or more units, I believe,) you need a local property manager whose number is on file with the code Dept. Local for them means within a 15-30 minute drive to the property, or something to that effect.
Hudson, NY, has similar requirements. Troy, NY is enacting those requirements, I believe.
For NY State, if you’re showing a rental property, the owner is legally allowed to do apartment showings, and in certain cases their maintenance staff can too(you might need to check with a real estate lawyer on this point.) For instance, if you’re a Licensed Real Estate Broker, and you have a property manager who works only for you, he/she can show apartments. If you’re not a licensed broker- then I’m not sure if it’s legal to have someone working for you do showings.
If the property is held in an LLC, then you don't qualify as the owner in many circumstances, even if it's a single-member LLC. For example- if you want to do an eviction, an LLC must be attorney-represented in court. So if you have properties in LLCs, you'll need a lawyer for anything requiring a court appearance.
Good luck with NY investing, I hope it’s as good to you as it’s been to me.
appreciate all of the feedback, seems property manager would be the best way to go at least starting out but the need for an attorney if the property is held in an LLC makes me pause a little.
If I am a real estate management company, do I need a real estate broker's license?
That depends on what services you provide. If you collect rent or place tenants in vacant spaces on behalf of your landlord client, the answer is yes. If, on the other hand, your services are strictly maintenance, the answer is no. you are not acting as a fiduciary (not handling another person's money).
@Mark Updegraff I respectfully disagree with the notion that anyone who's good at selling real estate has no interest in making "Peanuts" off of property management. I made top 7% of agents last year and will do better this year. The reason I started a property management company is because I need a functional, trustworthy one for MY rental properties especially once my portfolio expands.
I agree that top agents are not putting off selling homes in order to manage a rental for $50/mo, but there are other motivating factors that come into play.
Create Lasting Wealth Through Real Estate
Join the millions of people achieving financial freedom through the power of real estate investing