Becoming a landlord

[ItTakes2ToMango]

Circumstances have led me to becoming the new owner of an apartment by business close today. Planning to use the passive profit to help my parents retire so I don't have as much burden later on (they WILL run out of their own cash. Matter of time....)  

 

I've setup an LLC and a bank account for specifically this already and I'm trying to read a lot, but surely there is advice I could only hear from the people so here I am. Anyone have any advice for a new, young landlord?

[Jatzu]

Read the laws in your area front to back twice. Make sure you know what you can and cannot do as a landlord. Double check to see how your area leans in terms of tenant / landlord on court decisions. I know in Ontario it was basically impossible to get rid of a bad tenant for a very long time and the process is awful and long.

 

When it comes to repairs for the place always get at least 5 quotes. NEVER tell the contractors who you get quotes from who they are pricing against. I have worked in the construction Industry for over 20 years. Collusion and price fixing is 100 % a thing and it's in every trade. Usually you can avoid it by simply just not letting people know who their competition is. Always ask for references if you get a good price and actually follow up and contact their references. I would typically weigh consultants as references more than other home owners/landlords.

 

Whenever you need to get work done on your property for repairs. MAKE SURE you get it done in spring or after summer school break. Contractors typically fill their schedules with public work from school boards during the summer break. If you get quotes and work that needs to be done ASAP during that time, you are going to be paying a hefty premium because most of the good contractors will be booked.

 

Set aside a good percentage of what you get monthly in rent for repairs. You will need it eventually and you don't want to be caught flatfooted when you need to pay for repairs. 

 

 

[ItTakes2ToMango]

1 minute ago, Jatzu said:

When it comes to repairs for the place always get at least 5 quotes. NEVER tell the contractors who you get quotes from who they are pricing against. I have worked in the construction Industry for over 20 years. Collusion and price fixing is 100 % a thing and it's in every trade.

Luckily, I have close, family friends licensed in both plumbing and electrical. And my soon-to-be FIL owns a HVAC company. They probably won't do the work but I can always ask them what a good deal is or what I should expect and I'm positive I'd get an honest answer. I can handle just about every other repair myself, I've fixed up more than a few houses in the past and I live only ~20 minutes away.

 

I'm really worried about how insurance is going to pan out actually... 

5 minutes ago, Jatzu said:

Whenever you need to get work done on your property for repairs. MAKE SURE you get it done in spring or after summer school break. Contractors typically fill their schedules with public work from school boards during the summer break.

That's really good to know actually, didn't think about that. 

 

6 minutes ago, Jatzu said:

Set aside a good percentage of what you get monthly in rent for repairs. You will need it eventually and you don't want to be caught flatfooted when you need to pay for repairs. 

I was going to set aside 100% of profits until the LLC bank account had enough in it to safely call an emergency fund. As long as I am at that threshold, 90% profits will go to my parents.

 

 

 

 

 

 

 

 

[GarlicDeliverySystem]

2 hours ago, ItTakes2ToMango said:

Luckily, I have close, family friends licensed in both plumbing and electrical. And my soon-to-be FIL owns a HVAC company. They probably won't do the work but I can always ask them what a good deal is or what I should expect and I'm positive I'd get an honest answer.

I obviously don't know your family, but one thing I have sadly observed first hand is that things can get weird when it comes to money, even among family. So while I would definitely get their advice on the price and quality of work, I also would try to have someone else have it done. Just so that in the case something does go wrong, business and family are not conflicting.

 

Even if they offer a good discount, keeping things like this separate, if possible, can save you a lot of headache and nerves in the long term.

[ItTakes2ToMango]

4 minutes ago, GarlicDeliverySystem said:

I obviously don't know your family, but one thing I have sadly observed first hand is that things can get weird when it comes to money, even among family. So while I would definitely get their advice on the price and quality of work, I also would try to have someone else have it done. Just so that in the case something does go wrong, business and family are not conflicting.

 

Even if they offer a good discount, keeping things like this separate, if possible, can save you a lot of headache and nerves in the long term.

Like I said, they will probably not ever do the work themselves. It's just free consultation for me, really 

[brukar]

As @Jatzu said, know the laws in your sleep. Especially the parts that limit what you can and cannot do. Having your ducks in a row will always be beneficial. And document things, with backups. 

 

Choice of tenant (if you get that luxury) can make a really big difference. Some can cause you no end of headache, others are the polar opposite. If you happen to strike gold and get a tenant that treats the property well, pays on time and is not a nuisance to their neighbours, do consider being lenient with rent raises and such if it helps keep them there. One year with a really bad tenant can eat the profits of several years with a good one.

 

If it's in an apartment building, it might be useful (if you are of the sociable kind) to get some form of relationship with the people in the nearby apartments (or at least the owners of them, if they also rent out). They might be willing and able to tell you if for example (as I found out months after the tenant in question had absconded) the police had been at the door several times because the guy renting was looking an awful lot like the local drug dealer, even had the same name and social security number.

 

Oh, and if something like that should happen, it might be nice for the next tenants if you have a chat with the police and explain that the dude they were looking for no longer lives there. My next tenants were not amused when people in uniform showed up at the door several months later looking for the previous guy.

[ItTakes2ToMango]

7 hours ago, brukar said:

hoice of tenant (if you get that luxury) can make a really big difference.

Yes, thankfully we get to choose. One of the downstairs neighbors whom I already know to be good people taking good care of their unit have a friend who is moving into town that is interested. We will vet further but seems promising

 

 

7 hours ago, brukar said:

do consider being lenient with rent raises and such if it helps keep them there

 

I have no intentions to ever raise rent without being forced to.

 

7 hours ago, brukar said:

If it's in an apartment building, it might be useful (if you are of the sociable kind) to get some form of relationship with the people in the nearby apartment

Hey look at that lol 

 

7 hours ago, brukar said:

They might be willing and able to tell you if for example (as I found out months after the tenant in question had absconded) the police had been at the door several times because the guy renting was looking an awful lot like the local drug dealer, even had the same name and social security number.

Yeah, that would be rough. I am hoping to take mostly post-graduate students if at all possible because they are usually well behaved and it's not the kind of apartment you throw a party in. 

 

7 hours ago, brukar said:

Oh, and if something like that should happen, it might be nice for the next tenants if you have a chat with the police and explain that the dude they were looking for no longer lives there. My next tenants were not amused when people in uniform showed up at the door several months later looking for the previous guy.

Oof..... 

[porina]

Rules/laws will vary with country but I'm going to guess in the western world it'll be somewhat similar. I have been a landlord myself and couldn't wait to get out of it! More below.

 

• Too late for this one, what condition is the property in? If it needs any work, get it sorted before you get anyone in. If there are some questionable areas, try to get them done before they become an absolute need. Older buildings may take more maintenance that will eat into your profits and consume time to manage.
• As others said, you need to know what your responsibilities are. Here, this includes: an annual gas safety check, a one-off full electrical wiring check, smoke/fire detectors.
• Here it is normal to check the prospective tenants to help you avoid bad ones. Landlords are required to ensure the person renting has legal right to live in the country. Many places would require them to show they have a job or other regular income, not just proof of funds. Being employed apparently reduces the risk of future problems. I fell outside the system when trying to rent a few years ago. I didn't have a job but had a large pool of cash, and finding landlords that accepted that was much harder since they don't know where that cash came from, or if there will be more. In the end I had to pay for 6 months up front, but rules are changing and that might not be an option in future. I think it is more to prevent bad landlords making unusual demands.
• Getting to know the tenant can help. If they report things that reasonably need attention, get it sorted.
• There may be management companies you can use to do the work for you. This will obviously take a big chunk of your profits. I forget the exact number, think the one I used took 20% or was it 25%? For that, they do all the paperwork and checks. If maintenance is needed they will have their approved list they can arrange to get sent in. I found mine to give a reasonable balance of cost and they didn't try to milk it. They become the tenants first point of contact so you don't have to deal with them directly. This might be more useful if you ever expand to multiple properties and managing it on your own starts to become a bigger time sink.

 

8 hours ago, ItTakes2ToMango said:

I have no intentions to ever raise rent without being forced to.

Your choice of course, but I'd suggest following inflation to keep things effectively constant. There may be limits to how much you can increase anyway.

 

 

Anyway, I said I couldn't wait to get out. Why? Several reasons. I inherited an old house (>100 years) with my brother. He had taken early retirement so had time to manage things. He did most of the work to prepare it. I was still working then so left him to deal with everything. That was fine until he passed away. Now I was managing it with his widow. Neither of us really wanted to do that. It gets worse. Ongoing repairs to the house basically took a large chunk of the income and there was no end in sight. Fix one thing, another thing needs attention. At that point, looking at the market value of the property vs the revenue it was bringing in, we realised if we sold it and put the money in a savings account, we'd get more without any of the stress from managing it. Also, I no longer have to fill in a tax return for it!

 

In the ideal case of a property that takes minimal routine maintenance, with a good tenant, it can work fine. But it is certainly not a given.

[Caroline]

How old is the place? if you do repairs don't let gcs or friends/family convince you need to replace the lighting for shitty LED wafers because "you'll save thousands a year trust me bro this is the future we don't do cans anymore" ... it's all crap, it'll cost you hundreds in maintenance a year because they have the lifespan of a fart in a tornado.

 

Stick to cans or flush mount.

 

I'm on the other side, doing the maintenance, and calls to replace that crap lighting massively outnumber calls for any other issue in the same category, it's time consuming, it's bad, and nobody else wants to do it.

 

AND NEVER LET TENANTS DRILL HOLES.

 

 

[brukar]

3 hours ago, Caroline said:

AND NEVER LET TENANTS DRILL HOLES.

YMMV here, depending on local laws. If my tenants wanted to drill holes to, say, hang a TV, I don't think laws here would give me any right to object to that provided they didn't somehow cause damage beyond the holes. Luckily my current tenants are cautious and not very handy, so they had me come put the TV mount on the wall. That let me find the studs and do it right. Not strictly my responsibility, but it's less bother than having to argue about damage later.

 

3 hours ago, Caroline said:

Stick to cans or flush mount.

The correct answer is replaceable LED bulbs, imho. I recently did the stupid and spent lots of money on non-replaceable light sources for my property. Only realized my momentous mistake later. Never again.

 

4 hours ago, porina said:

Getting to know the tenant can help. If they report things that reasonably need attention, get it sorted.

Very much this, but also; keep the relationship at arm's length. Money and friendship can be a toxic mix, and since the relationship is already started out with the money bit, actual friendship could become a minefield. 

 

13 hours ago, ItTakes2ToMango said:

I have no intentions to ever raise rent without being forced to.

IMO this depends on what time scale you are looking at. If it's someone who might end up living there a decade or more, consider having a clause in the contract to at the very least follow inflation. That way you don't risk suddenly being in the red. For people living there a couple of years, you could just eat the (usually small) creeping loss and adjust to market rates for the next tenant. Less bother that way.

 

Again, read local laws. Here they clearly state the conditions for changing the rent, which is at most once per year following Consumer Price Index, and after three years we can adjust to market rates for similar rentals in the area. This goes both ways, so if the rental market crashes, the tenant can demand lower rates. Same for the CPI one. 

[ItTakes2ToMango]

On 5/28/2026 at 4:35 PM, porina said:

Too late for this one, what condition is the property in? If it needs any work, get it sorted before you get anyone in. If there are some questionable areas, try to get them done before they become an absolute need. Older buildings may take more maintenance that will eat into your profits and consume time to manage.

Great condition and I paid 20k less than market for it. I have to redo caulk, vents, kitchen counter, and some floor panels. Structurally sound. Plumbing and Electrical are sound, all appliances work and are clean. Water heater is brand new. Once the plumbing/electrical leaves my unit, it's handled by the HOA run by the complex. 

 

On 5/28/2026 at 4:35 PM, porina said:

Here it is normal to check the prospective tenants to help you avoid bad ones. Landlords are required to ensure the person renting has legal right to live in the country. Many places would require them to show they have a job or other regular income, not just proof of funds. Being employed apparently reduces the risk of future problems. I fell outside the system when trying to rent a few years ago. I didn't have a job but had a large pool of cash, and finding landlords that accepted that was much harder since they don't know where that cash came from, or if there will be more. In the end I had to pay for 6 months up front, but rules are changing and that might not be an option in future. I think it is more to prevent bad landlords making unusual demands.

Check  

 

On 5/28/2026 at 4:35 PM, porina said:

There may be management companies you can use to do the work for you. This will obviously take a big chunk of your profits. I forget the exact number, think the one I used took 20% or was it 25%? For that, they do all the paperwork and checks. If maintenance is needed they will have their approved list they can arrange to get sent in. I found mine to give a reasonable balance of cost and they didn't try to milk it. They become the tenants first point of contact so you don't have to deal with them directly. This might be more useful if you ever expand to multiple properties and managing it on your own starts to become a bigger time sink.

I knew that and thought about it but maybe if we if had more than one property to rent out. Checked some around here, lowest cut was like ~40% for less than 5-10 properties  

 

On 5/28/2026 at 4:35 PM, porina said:

Anyway, I said I couldn't wait to get out. Why? Several reasons. I inherited an old house (>100 years) with my brother. He had taken early retirement so had time to manage things. He did most of the work to prepare it. I was still working then so left him to deal with everything. That was fine until he passed away. Now I was managing it with his widow. Neither of us really wanted to do that. It gets worse. Ongoing repairs to the house basically took a large chunk of the income and there was no end in sight. Fix one thing, another thing needs attention. At that point, looking at the market value of the property vs the revenue it was bringing in, we realised if we sold it and put the money in a savings account, we'd get more without any of the stress from managing it. Also, I no longer have to fill in a tax return for it!

 

In the ideal case of a property that takes minimal routine maintenance, with a good tenant, it can work fine. But it is certainly not a given.

That is certainly an unsavory situation, sorry you had to go through that.

 

Luckily, this was very much intentional. I bought the property off an acquaintance who needed cash quick and I had seen the apartment several times before knowing it to be in good condition. Asked my big time realtor friend what he thought and he said that if I didn't buy it, he would. I believe him, too. Nothing to gain in this scenario and he has been buying loads of similar type properties lately lol 

[ItTakes2ToMango]

On 5/28/2026 at 5:18 PM, Caroline said:

replace the lighting for shitty LED wafers

I would fucking NEVER. Hate those things 

 

On 5/28/2026 at 5:18 PM, Caroline said:

AND NEVER LET TENANTS DRILL HOLES

Meh, I'll probably let them do what they want in regards to paint/holes

 

Might learn a quick lesson doing that, but I think a good tenant appreciates the freedom more than I hate patching a few holes here and there and doing another paint job when they leave. 

[porina]

22 minutes ago, ItTakes2ToMango said:

Meh, I'll probably let them do what they want in regards to paint/holes

A common thing around here is something in the contract that says when they eventually leave they return it in the same condition as when they went in (fair wear and tear allowed). So if they do make any modifications, unless agreed otherwise with yourself, they would have to undo it or you can charge them to get it rectified.

[ItTakes2ToMango]

4 minutes ago, porina said:

A common thing around here is something in the contract that says when they eventually leave they return it in the same condition as when they went in (fair wear and tear allowed). So if they do make any modifications, unless agreed otherwise with yourself, they would have to undo it or you can charge them to get it rectified.

To me, that feels a bit like a janitor asking you to clean up after yourself or else he'll charge you for the job they're already paid to do. Not that it isn't NICE to clean up after yourself, but it's kinda the landlords job and if I'm going to net roughly ~$6500/year, I might as well patch a few holes 

[porina]

2 minutes ago, ItTakes2ToMango said:

To me, that feels a bit like a janitor asking you to clean up after yourself or else he'll charge you for the job they're already paid to do. Not that it isn't NICE to clean up after yourself, but it's kinda the landlords job and if I'm going to net roughly ~$6500/year, I might as well patch a few holes 

It's not so much a cleaning thing although that does factor into it too. I guess the standard is, what is a reasonable condition to keep things in? If they fall outside that, it will cost you time and money to resolve it.

 

I kinda do agree, if someone wants to put some nails in to hang a picture for example, that seems a reasonable thing for them to do. Here however, unless agreed specifically with landlord, the expectation is when moving out, those holes will be filled and if needed pained over to restore it to how it was. If you're agreeing as landlord with it being left as is, that's fine! I suppose the more extreme version is basically if they cause damage which is clearly their fault, it is reasonable for them to resolve it or pay you equivalent to do so. At some point, they might want to do something you might not like. So keep in mind there is a line somewhere.

[ItTakes2ToMango]

44 minutes ago, porina said:

It's not so much a cleaning thing although that does factor into it too. I guess the standard is, what is a reasonable condition to keep things in? If they fall outside that, it will cost you time and money to resolve it.

 

I kinda do agree, if someone wants to put some nails in to hang a picture for example, that seems a reasonable thing for them to do. Here however, unless agreed specifically with landlord, the expectation is when moving out, those holes will be filled and if needed pained over to restore it to how it was. If you're agreeing as landlord with it being left as is, that's fine! I suppose the more extreme version is basically if they cause damage which is clearly their fault, it is reasonable for them to resolve it or pay you equivalent to do so. At some point, they might want to do something you might not like. So keep in mind there is a line somewhere.

Oh yeah, I want to have an agreement saying that any damage must be rectified through either deposit, paying approved contractors, or decent self-repair but I just don't want to feel like I'm punishing people for rules I once personally disliked as a tenant.

 

People want to hang things up. They want to have color in their lives. I don't want them to damage my apartment but I want them to live life in expected human fashion without having to think of me as a roadblock for them. 

[Echothedolpin]

You really need to seek out a lawyer in your area who works real estate/rental law and can write up a contract that fits with the location and your local legal requirements. Spend some money and get something well written that covers your bases.

[wasab]

Don't get screw over by tenants