9 Steps To Becoming A Landlord

One of the most important and frequent questions I get from first-time investors as we near the purchase of their first duplex, triplex or fourplex is “Now what do I do?” In other words, how does one go from shopping for an investment property to actually being a landlord.

Here are several steps I recommend:

1. Transfer utilities and any services into the new owners name.
2. Download/read the Minnesota Landlords and Tenants Rights & Responsibilities handbook and read it. It’s easy to read and provides a good general overview of what each side can and can’t do.
3. Write up a notice introducing yourself to the tenants, and explaining where and how they should pay rent. In my opinion, setting up an Automatic Clearing House (ACH) payment system with the bank, so the rent is automatically transferred from the tenant’s to owner’s account on the first of the month. This eliminates payment delays common in other methods (check, Venmo, etc.).
4. Open a checking and savings account unique to the property. At closing pro-rated rent and security deposits should be transferred to the buyer. I like to put the security deposit in the savings account so it’s there when the tenant moves out, and pro-rated rent in checking. By paying property expenses out of a specific account, it feels more like a business, and also makes doing taxes easier.
5. Many cities have additional rules for landlords and tenants. Minneapolis has comprehensive resources for housing providers and residents here. St Paul has a similar guide.
6. If required by the city, apply for a rental license. Minneapolis requires first time housing providers to have a rental property inspection before issuing a license. Owners can earn a $250 discount on the inspection by attending a self-study Rental Property Owners/Managers workshop.
7. Join the Minnesota Multi Housing Association (MMHA). Take advantage of their monthly investors workshops, as well as their editable landlord-friendly forms and leases.
8. Don’t be afraid to reach out to other housing providers for advice. A good tip from a seasoned landlord can literally save thousands of dollars.
9. Shameless plug – attend the Duplex Chick monthly Zoom call for conversations about property ownership, market data, and important legislative updates on issues that impact housing providers. To register for our next session on Tuesday, May 6 at 5 pm, register here.