Individuals who are interested in real estate investing often ask us what it takes to invest in properties in northeast Philadelphia, or in Philadelphia in general. There are a few things that need to be considered when you’re interested in acquiring rental properties.
INVESTING IN RENTAL PROPERTIES: GOVERNMENTAL PERMITS
You’ll need to consider the necessary governmental permits and activity licenses. These are critical to do business in Philadelphia. For example, did you know that Philadelphia requires that you have a commercial activity license for investment properties? It’s commonly called a business privilege license, and the city will charge you to obtain it.
INVESTING IN RENTAL PROPERTIES: HOUSING INSPECTIONS AND RENTAL SUITABILITY
Another thing you need to include is the housing inspection license, which excludes some one-off condo rentals, but generally is required for all rental properties. A certificate of rental suitability needs to be obtained from the Department of Licenses and Inspections. Many owners do not realize that the Department of Licenses and Inspections requires that you are a resident of Philadelphia or have offices in Philadelphia to get the rental suitability certificate.
INVESTING IN RENTAL PROPERTIES: DISCLOSURES TO TENANTS
Prior to renting, you’re required to provide the tenant with information on the Philadelphia Gas Works landlord Cooperation program as well as a lead disclosure. There are an assortment of other documents that you need to share with your tenant. They are all manageable, and we do it on a routine basis for the landlords who work with us.
What does this mean for you?
If you’re not familiar with the requirements, you can get caught for your noncompliance. For example, if you try to evict someone without a rental suitability license, good luck trying to get the courts to award you an eviction. The judge will have something to say because this is something that’s absolutely required.
You can figure this out as an individual landlord. Information is available on the city’s website. A better idea is to come to experts who do this on a day to day basis.