The Making of a Landlord: A Christmas Carol, Part IV (solutions)

The Making of a Landlord: A Christmas Carol, Part IV (solutions)

Read "The Making of a Landlord: A Christmas Carol, Part III"

The next morning, I reflected on the strange happenings of the night before and the tenant horror stories I shared with the Ghost of Christmas Past.  I was glad for another chance to re-examine my own role in those bad experiences.  Here are some lessons I learned from those situations:

1.) Don't let tenants’ actions make you so poor that you can't run your business.

Empty PocketsThis is exactly what happens when you allow issues like late rent to persist.  And this can be a problem that spreads like a disease.  Tenants do talk to each other.  If one tenant with a good payment record hears that another slow-paying tenant has not faced any real consequences, that tenant can become resentful and start testing the boundaries as well.  Very soon you’ll find your resources stretched so thin that you can’t make good choices for your investment.

2.) Don’t allow tenants to treat paying their rent as a favor to you.

Think of it like this: when a renter signs a contract (that’s technically what a lease is), they are agreeing to stick to certain terms.  If their lease says they’re supposed to pay rent on the 1st of the month, any unpaid rent on the 2nd day of the month is like money being “borrowed” from you--without your consent.  This thought occurred to me after many years of banging my head against the “late-rent-excuses” wall.

I once had a meeting with a tenant whose rent was never paid on time.  I asked if she had a friend or family member she could go to on the first of every month to borrow $800?  Before she answered, I went on to ask if that same friend or family member would allow her to repay the full loan only in some months while in other months she could pay only a portion of the loan?

I purposely phrased this in the style of the traditional “loaded question.”  The classic, prototypical example of this  was commonly thrown around in law school and philosophy classes during a less gentle, politically correct time: “Do you still beat your wife?”  The idea is that some questions are phrased so they don’t allow for an easy answer from the person being asked.  In this case, it’s obviously bad if the husband answers “yes.”  But even if he says “no” it implies he did at one time and then he stopped.

I was expecting the tenant to say that she did not have a loved one who would loan her the amount of her rent money every month.  In that case I would have asked her why she thought it was okay to “borrow” the money from the landlord who is essentially a stranger to her (meaning me).  When she surprised me by saying that she did know someone she could borrow money from sometimes, I was still prepared to tell her to go that person to GET MY MONEY!

3.) Being a landlord is a not a popularity contest-- it's a business.

Blog Jumping Broom Wedding picIt’s okay to have friendly interactions with tenants who live in your units.  Go ahead and attend a wedding or a funeral or a graduation if the tenant thinks highly enough of you to invite you.  Just don’t lose sight of the fact that the foundation of your relationship is a business one.

I even organize an annual cookout at each of my buildings so tenants can get to know each other and get to see me in a more casual setting.  I sponsor the bulk of the items and each resident gets to showcase their signature dish.  But I don’t do this because I’m looking to build an army of BFFs. This is a low-cost way any landlord can use to reduce headaches throughout the year.  If you introduce tenants to one another, you make them feel more comfortable to approach their neighbor when issues arise (noise disturbances, misplaced mail, parking issues, etc.) instead of calling you first.

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Blog Kick CanWhen I got honest with myself I realized it was not always that I was being kind to tenants, but it was more that I was being lazy about running my business.  Instead of addressing problems which were not likely to get better, I was kicking the can down the road and avoiding the logical resolution.  Allowing a tenant to build up a big balance they can’t pay is not really doing the tenant any favors anyway.  Big balances can make tenants do desperate things and force you to have to ding their credit by taking them to court.

Anyway, it’s no secret that sincere kindness is not always appreciated.  That’s why your goal as a landlord should not be to aim for kindness but to aim for fairness.  Life happens. Even to tenants. But don't let their problems become your problems.   While it’s true that even fairness is not always rewarded, at least being fair puts you in a less vulnerable position to leave you feeling like you gave more than you should.  Others look out for their own self-interests. You have to look out for yours, too.  Even when things don’t go as planned, you can sleep better at night.  Cheers!

Read this FindLaw.com article "How a Tenant Bankruptcy Affects a Landlord's Right to Evict."

 

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