How to Become a Landlord in Philadelphia: A Step-by-Step Guide to Starting a Rental Business

Owning a rental in Philly means more than handing over keys; it means wrestling with rental licenses, lead safety rules, zoning quirks, and the city’s not-so-light stack of requirements.

The process involves multiple forms, fees, and compliance steps that can challenge even experienced investors. But don’t let the red tape scare you off. Philadelphia’s rental market is thriving, and with the proper steps, you can build a profitable, compliant rental business that stands the test of time.

Here’s your step-by-step roadmap to legally and successfully become a landlord in the City of Brotherly Love.

Step 1: Register Your Business — BIRT and eCLIPSE

Start by registering with the City of Philadelphia for the Business Income and Receipts Tax (BIRT). This is required if you’ll be earning rental income. You’ll also need to set up an account on eCLIPSE, the city’s online system for managing business licenses and permits.

Step 2: Obtain the Right Business License

Most landlords need a Commercial Activity License (CAL). Suppose you live in the building and rent out up to three other units in that same building (for example, an owner-occupied duplex, triplex, or fourplex).

In that case, you can obtain an Activity License Number (owner-occupied) instead of a CAL.

Step 3: Verify Ownership and Clear Property Taxes

You’ll need to show proof of ownership, such as a recorded deed or settlement statement, and confirm that your property taxes are up to date.

The City may require a Tax Clearance Certificate when you apply or renew. You can check your compliance status and request this certificate through the Philadelphia Tax Center.

Step 4: Zoning and Certificate of Occupancy

Confirm your property’s legal residential use. For existing dwellings, you just need proof of lawful occupancy. A Certificate of Occupancy is only required after new construction, major alterations, or a change of use.

Step 5: Apply for a Rental License

Philadelphia requires a Rental License for any property being leased, whether it’s one room or a multi-unit building. Each rental property needs its own license, valid for one year and subject to renewal. Late renewals can result in penalties and potential enforcement actions.

Step 6: Lead Paint Safety Certification

If your property was built before February 1978, you must certify that it is lead-safe or lead-free. Properties built after February 1978 are exempt. This involves inspection and documentation from a certified lead inspector.

Step 7: Obtain a Certificate of Rental Suitability

Before leasing the unit, you must provide your tenant with a Certificate of Rental Suitability. This certificate confirms your property meets safety and habitability standards (like functional smoke detectors and no open violations).

It must be issued within 60 days of the lease start, and you are legally required to give tenants a copy of the City’s Partners in Good Housing brochure along with it.

Step 8: Join the PGW Landlord Cooperation Program (Optional)

Though not required, it’s a good idea to enroll in Philadelphia Gas Works' Landlord Cooperation Program. This allows you to be notified of any gas shut-offs or unpaid bills, giving you a chance to prevent damage or tenant complaints.

Step 9: Screen Tenants and Follow Fair Housing Laws

Use a thorough, legal screening process and avoid discriminatory practices. Treat every applicant fairly, follow the Fair Housing Act, and consider requiring renters' insurance for added protection.

Turning Compliance Into Cash Flow

Congrats! You’ve made it through the Philly landlord bootcamp. Between business licenses, lead tests, and zoning checks, your paperwork might now rival the Liberty Bell in historical significance.

But here’s the upside: once you comply, you’re not just avoiding fines, you’re building a consistent income stream and long-term equity.

Managing tenant issues, repairs, and city requirements can drain even the best landlords. That’s where Innovate Realty and Property Management comes in; we don’t just manage, we maximize.

From better tenants to faster rent and fewer headaches, we handle the hassle so you can focus on the income. Partner with us today and experience stress-free, high-performance property management.

FAQ

Q: How often must I renew my Rental License?
Annually. If you renew late, the city may impose penalties and enforcement actions.

Q: Do I need lead certification for buildings built after 1978?
No. Properties built after February 1978 are exempt, so you can file for an exemption.

Q: Can one Rental License cover multiple units?
Yes, a single Rental License can cover all units within one building (each unit must be listed). If you own multiple buildings, each building requires its own license.

Q: What is the Certificate of Rental Suitability for?
It confirms your rental is safe, habitable, and free of code violations. You must give it to your tenant before they move in.

Q: What is the eviction diversion program?
Philadelphia’s Eviction Diversion Program is now permanent. It requires landlords and tenants to attempt mediation before filing for eviction, helping reduce legal costs and keep tenants housed.