tips for a first time aparment building buyer
August 27, 2009 11:48 AM Subscribe
What do you wish you'd known before buying your first apartment building?
We are in the early stages of thinking about purchasing an apartment building as an investment property, so just looking for some pointers from any MeFites who have gone through the same process.
We are in the early stages of thinking about purchasing an apartment building as an investment property, so just looking for some pointers from any MeFites who have gone through the same process.
Best answer: Step 1: Put a housing lawyer from the same state as the property on retainer.
Step 2: Book some time with said counselor, during which he walks you through the list of "Things you should never ever do" as a landlord in your state, and what you are and aren't allowed to do with respect to tenants and property.
For example: In NYS, don't ever be the landlord that fails to provide heating during the winter. The fines are staggering.
Every state has hundreds of laws and regulations that limit what you can do. Get to know them before they bite you in the butt.
[IANAL.]
posted by Citrus at 1:14 PM on August 27, 2009 [1 favorite]
Step 2: Book some time with said counselor, during which he walks you through the list of "Things you should never ever do" as a landlord in your state, and what you are and aren't allowed to do with respect to tenants and property.
For example: In NYS, don't ever be the landlord that fails to provide heating during the winter. The fines are staggering.
Every state has hundreds of laws and regulations that limit what you can do. Get to know them before they bite you in the butt.
[IANAL.]
posted by Citrus at 1:14 PM on August 27, 2009 [1 favorite]
Best answer: I'm a leasing agent for a property management company and I would say make sure and drive by there at different times of the day because some places seem fine durring the day and at night there's a lot of action and drugs around.
posted by Melsky at 1:40 PM on August 27, 2009 [2 favorites]
posted by Melsky at 1:40 PM on August 27, 2009 [2 favorites]
Best answer: I recommend starting with a couple of books to make sure you have considered the entire breadth of the responsibility you're taking on.
The New No-Nonsense Landlord is one I like.
I also like the Nolo books such as Every Landlord's Legal Guide.
I would make sure you have property taxes covered by a mortgage escrow (usually true, but make sure. Any other taxes and utility fees need to be budgeted for, as well as incidental repairs and maintenance, so that you aren't caught short. Keep at least a mental kitty for the big infrequent repair/replace items such as a furnace or fridge. The amount of time that two of these are needed at once will stun you.
Attend to all plumbing problems as quickly as possible. Water damage can be unbelievable and make your tenants hate you.
Review the tenant paperwork and issue new leases if necessary. If your state allows it, issue some property restrictions (no overnight guest parking, say) as an addendum to the lease which the tenant signs.
Don't be friends with your tenants. Follow up immediately on repair issues, and be just as prompt with late rent. It may be advantageous to give a discount for early rent vs. a fee for late rent. Check criminal records before you rent to anyone.
Apartment cleanup, depending on your demographic/neighborhood, can be anywhere from $50 to $500. It's very surprising how much work or time small issues like a broken doorstop can be.
You will always have that one tenant who can't resist letting the boyfriend and/or extended family move in the first time your back is turned. These people can be very unaccountable to you. Get them on the lease or they get out.
posted by dhartung at 5:43 PM on August 27, 2009 [2 favorites]
The New No-Nonsense Landlord is one I like.
I also like the Nolo books such as Every Landlord's Legal Guide.
I would make sure you have property taxes covered by a mortgage escrow (usually true, but make sure. Any other taxes and utility fees need to be budgeted for, as well as incidental repairs and maintenance, so that you aren't caught short. Keep at least a mental kitty for the big infrequent repair/replace items such as a furnace or fridge. The amount of time that two of these are needed at once will stun you.
Attend to all plumbing problems as quickly as possible. Water damage can be unbelievable and make your tenants hate you.
Review the tenant paperwork and issue new leases if necessary. If your state allows it, issue some property restrictions (no overnight guest parking, say) as an addendum to the lease which the tenant signs.
Don't be friends with your tenants. Follow up immediately on repair issues, and be just as prompt with late rent. It may be advantageous to give a discount for early rent vs. a fee for late rent. Check criminal records before you rent to anyone.
Apartment cleanup, depending on your demographic/neighborhood, can be anywhere from $50 to $500. It's very surprising how much work or time small issues like a broken doorstop can be.
You will always have that one tenant who can't resist letting the boyfriend and/or extended family move in the first time your back is turned. These people can be very unaccountable to you. Get them on the lease or they get out.
posted by dhartung at 5:43 PM on August 27, 2009 [2 favorites]
Response by poster: Thanks for the responses guys, I'll definitely check out the books.
posted by zeoslap at 10:59 PM on August 28, 2009
posted by zeoslap at 10:59 PM on August 28, 2009
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posted by iamnotateenagegirl at 12:12 PM on August 27, 2009