Being a Landlord
/Being a landlord to me is more than just another income- you are providing someone a place to call home. It can be difficult trying to be fair and reasonable, yet run a business. Essentially though, owning and renting real estate is a business- so it should be treated as such. We have all seen slum lords who do the absolute minimum and collect their check every month. Or you have landlords at the opposite end of the spectrum that just get taken advantage of. I once had a guy tell me he had a tenant not pay rent for ten years. How in the world he let that happen is beyond me, but he obviously didn’t want to push the issue and just let it go. It can be easy to fall into either of these traps. Dealing with people is tough. So to avoid the pitfalls of being landlord set the expectations for yourself and the tenant up front.
When you sign a lease with a tenant you are signing a contract that both parties are to uphold. If something breaks and needs fixed, it’s expected that the landlord will fix it within a reasonable amount of time. I believe by law, the issue needs addressed within 30 days once it’s been submitted. Personally, we like to handle issues as soon as possible (typically within 5 days). We like to follow the golden rule and treat people how you would want to be treated. It applies to all facets of life, whether personal or business. The biggest complaint I hear from friends and tenants is about past landlords that never addressed problems. From the perspective of a tenant, I would lose respect for someone who doesn’t keep up with their property. If the landlord doesn’t care about the property, what message does that send to the tenant? What incentive do they have to pay on time or take care of the apartment? And if there isn’t mutual respect, it’s going to be a tough relationship.
From a landlord perspective, it’s easy to get burned once or twice and stop caring. This is where you need to set the expectations up front and stick to them. Sticking to your expectations can be tough, but ultimately it’s the only way to run your business. If a tenant habitually pays late and you let it go, why would they bother to pay on time if there are no consequences?
Think of being a landlord like owning a shop. Someone comes in to buy goods, you don’t let them leave without paying? You also don’t let them come in and trash your shop without consequence, right? If you are providing someone a service (such as an apartment), and you are maintaining the property- it’s only fair that the tenant keep up their end of the contract. If the contract is breached, then tenancy is forfeited.
Now obviously it’s not always this black or white. It can be a little tougher when you are dealing with people’s homes. We have recently adopted a three strike rule. We understand that things can happen and don’t want to be completely insensitive to that. In the same breath, we have a lot of pride in what we do and have put a lot of time and money into these apartments. You have to take the personal aspect out of it and realize its business. When things are going well, everything is great- but when one party fails to uphold the contract, it can get uncomfortable. You just have to be okay having difficult conversations. I can’t say it’s ever easy, but you learn more with each property and tenancy.
To help you get started with expectations to address with a tenant (in addition to the lease), here’s a list of the top items we encounter.
Expectations for repairs- mutual agreement between tenant and landlord
Best way to communicate
How rent will be paid (check, mail, paypal)
Late fees and when they apply
If rent is over two weeks late and no communication is made- notice to evict is sent (three strike rule is implemented here)
Walk through of property on yearly basis or more frequent depending on condition (three strike rule is implemented here also)
Police calls or illegal drug activity not tolerate
I think it’s important to discuss things up front when you are signing a lease so there is no confusion moving forward. Hopefully none of these items are an issue, and in all honestly we’ve been very fortunate with our tenants and the relationships we have with them. Although, the more properties you have the greater the chance you will experience some sort of problem eventually. So it’s better to be prepared and have a plan in place versus struggling through it and getting discouraged with the process. Best of luck and we’d love your feedback!
