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The Essential Guide to Being an Amateur Landlord in DC

  • March 31, 2016

by Lark Turner

image
An apartment for rent in DC.

This article was originally published on UrbanTurf in 2014, but we are re-publishing today to remind readers of the steps that property owners can take to become amateur landlords.

UrbanTurf occasionally gets questions about the steps that need to be taken to legally rent out a room, basement or income unit, so we’ve compiled a handy guide to help out.

Below, we have covered the basics for someone that is looking to be a landlord. In addition to this advice, we recommend consulting directly with DC’s Department of Consumer and Regulatory Affairs (DCRA) if you’re confused or unsure whether your unit needs a particular certification.

Step 1: Make Your Place Legal

The first thing you should do before you rent is make sure your unit is up to code and legally rentable. If you’re renting out a house or a single apartment, you’ll need to get a basic one-family business license to proceed (it’ll run you $190.30), as well as a certificate of occupancy. If you’re renting out an English basement or a two-unit building, you’ll need a two-family rental license, which cost $268.40. Multi-family buildings with three or more units require different licensing and aren’t covered in this article.

DCRA’s Matt Orlins recommends applying for one-family licenses online.

“If you’re doing this as a second source of income, time may be at a premium for you,” Orlins said. “Take advantage of resources that can be accessed from your home or office.”

Two-family licenses aren’t eligible for online ordering.

An inspection of the rental is required when getting the license, so your unit will need to be up-to-code. Orlins notes that this process can have an upside, as it can “help a landlord reassure any potential tenants about the quality and condition of the property.” You have to get an inspection within 45 days of obtaining your license. You can make an appointment by calling the Inspections and Compliance Administration at (202) 442-9557.

Besides needing a two-family license, a legal basement rental must adhere to a rigorous code. Check out our look at extra steps you may need to take here.

If you’re renovating an apartment and plan to lease it out, you may want to consider using tenant-friendly finishes. As we’ve previously written, this can include spill-friendly floors, like tile or linoleum, and hardy materials that will withstand abuse.

Step 2: Consider a Property Management Company

If your unit is legal and you’re interested in skipping the hassle outlined in steps 3-7, consider using a property management company that will take care of the rental process for you. The con: Property management companies take as much as 10 percent of the rent for their services, depending on the company that you use.

Step 3: Figure Out How Much to Charge

What’s your place worth, and how much should you charge? The condition of your rental unit, its location and the time of year you plan to rent it out can all have an impact on price. You’ll want to take into account not just the price of comparable properties in your neighborhood, but also your mortgage, anticipated maintenance costs and time between tenants. Rentometer is a good source for figuring out whether the rent you’re thinking of charging is reasonable, and you can always look on Craigslist at similar rental units in your area to see what they are charging.

Step 4: Consult an Attorney

Consulting with an attorney about your lease and goals for renting is a good idea before getting a tenant into the unit.

Even if you’re using a lease agreement template, in DC it’s wise to spend an hour or two with a tenant-landlord attorney to go over the lease and see if anything needs to be changed or added in. DC’s rental laws can be intimidating for a new landlord; plenty of UrbanTurf readers have said protective tenant laws would discourage or prevent them from renting out their place.

Step 5: Have a Maintenance Plan in Place — and Know Your Apartment

Once your house is up to code, fully licensed and ready to rent, it’s time to start thinking about possible tenants, as well as your maintenance plan. In short: prepare for the worst and have a good idea of what condition your rental unit is in. Are the appliances and utilities of good quality and in good condition? That can give you an idea of how much to have stocked away in savings. Plumbing, electricity and other important components can all fail at some point and you will be required to both fix these issues and foot the bill. Have good names on file and try to establish a relationship with a service provider you trust before you ever need to deploy an emergency repair plan.

Make sure to do a careful and extensive walk-through with your tenant prior to move-in. Your property doesn’t need to be in perfect shape, but you and your tenant should be in agreement about the condition of the apartment to avoid any disagreements upon move-out. Attest to the apartment’s move-in condition on a form signed by both you and your tenant.

Step 6: Solicit Tenants

With Craigslist, advertising a property to a wide range of tenants has never been easier. Make sure your listing is detailed, accurate and includes photographs. You can also list a rental using MRIS or other listing services, though Craigslist is easy, free and generally casts a wide net. If you decide to go with a property management company, they will take care of this step for you.

Step 7: Vet Potential Tenants Properly

We could arguably devote an entire article to tenant vetting in DC, given the city’s laws that favor tenants over landlords, but here is quick look at what you’re looking for in a good tenant:

Make sure you ask for, and receive, sound evidence of all of the following.

  • Someone who can pay on time every month.
  • Someone with a steady income and job.
  • Someone with a good rental history.

It’s a good idea to perform a credit check, check references and obtain proof of income. Also, make sure to avoid discrimination when screening tenants.

See other articles related to: amateur landlord

This article originally published at http://dc.urbanturf.com/articles/blog/step_by_step_guide_to_amateur_landlord_in_dc/9045

3 Comments

  1. hma8 said at 3:48 pm on Friday October 3, 2014:

    I bought a house that has an english basement rental. It was legal and previously had a c of o.

    Here are the steps I took after I bought to get it ready for rental:


    1) Certificate of Occupancy:
    -Go to DCRA @ 1100 4th St SW
    -Go to Records office and get a copy of previous C of O
    -Go to cashier to pay
    -Go back to records to pick up new C of O copy
    -Go to application to engineering coordintor, then zoning, then issuance
    -Go to cashier
    -Go back to issuance

    ——> Done, you have a C of O

    2) Business License:
    -Go to Licensing at Office of Tax and Revenue @ 1101 4th St SW for a FR500 tax registration form
    -Go back to License Center @ 1100 4th St SW
    -Fill out 2 family rental application, bring C of O and FR500
    note: do NOT go at noon, everyone goes out to lunch while everyone else waits.


    —-> Done, you now have a business licence


    3) Schedule Inspection of rental unit
    4) Apply for rent control exemption

    - Fill out RAD Registration/Claim of Exemption Form
    - Go to DCHD @ 1800 Martin Luther King Avenue SE

    —-> Done, you now are exempt from rent control

  1. TomCarcone said at 4:48 pm on Thursday January 29, 2015:

    Great article! We have many clients come to us with these questions, so we know it will be helpful for new landlords.

    The article mentions avoiding discrimination when screening tenants. Many rental property owners are aware of federal laws prohibiting housing discrimination but don’t realize that localities in the region have additional anti-discrimination protections. You can read about local fair housing laws in this article on our property management resource page.

    As a property management company we may be biased, but for those who might be finding the process of becoming a landlord intimidating or time consuming, a quality property management company’s experience can be a great resource. The article mentions a typical fee for ongoing management, but most companies charge a separate one-time fee for leasing, so you can pay for only the help you need. And, as you can see from just the initial tasks mentioned in article, those fees cover some time consuming work. In addition to helping you find qualified tenants who will take care of your property, good companies can usually help you minimize vacancy times and get you good deals on quality maintenance and repairs, which save money.

    In the end, it is a personal decision. Some owners have a lot of time to invest and prefer complete control, while others look forward to delegating the hassles. Whatever the choice, we wish any new landlords great success!

    -Tom at Gordon James Realty

  1. EckingtonNEDC said at 11:49 am on Saturday June 13, 2015:

    hma8 & TomCarcone, thanks for that extra info!

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