Being a landlord or owning rental properties means you are in the real estate business, right? Well, that is actually wrong. Owning a rental property or being a landlord puts you in the people business. Sure, real estate is involved, but that is the product.
Finding, dealing with, and managing tenants are where the magic happens. Your relationship with tenants is paramount to your success. You can have a great building, but without people, you don’t have anything.
You’ve probably heard plenty of bad tenants stories. You know, the kind where tenants demand repairs in the middle of the nights. Or the rumors about ‘nightmare tenants’ completely destroying a property. Perhaps you’ve even heard a story or two about tenants skimping on their rent or eviction problems.
Well, in addition to properly screening tenants, most of these problems can be avoided by knowing how to manage and treat your tenants.
The Golden Rule
I am about to take things back to kindergarten for a moment. The golden rule for managing tenants is simple. Treat your tenants as you would want to be treated. This may seem basic, but it goes a long way. Sometimes the lessons we learn as kids provide great value as adults. This is one of them. Heck, as humans we should probably revisit the basics for a lot of things.
Not all landlords are kind, caring or respectful. Heck, from what I gather most of them are rude, neglectful and absent. My old business partner and mentor would always tell our tenants, “I got into this business to be the landlord that he never had but thought he deserved.”
I agree with his statement. I’ve been house hacking for almost 5 years but remember my previous landlords. We will call my old landlord Bob (not his real name). Bob had the habit of stopping by unannounced and without permission. One evening, I just finished taking a shower and was only wearing a towel. As I opened the bathroom door to the hallway, I found Bob standing there. Not cool.
On another instance, as I arrived home from class one afternoon, I found Bob sleeping on our living room couch.
Bob was a nice guy but he did not respect our privacy and he never gave notice before visiting the house. This is unacceptable and why I believe in giving 24-hour notice to tenants prior to stopping by. Obviously, this rule does not apply if there is an emergency like a fire or flood. Bob was also neglectful and hard to get ahold of. Often, repair requests went ignored or were taken care of in a slow manner.
So going back to the golden rule:
You wouldn’t want someone screaming at you, right? So don’t scream at your tenants.
You wouldn’t want someone to ignore you, right? So don’t ignore your tenants
You wouldn’t want someone to neglect repair requests for the property, right? So don’t ignore repair requests from your tenants.
Treat your tenants as you’d want to be treated. Keep this, shit kindergarten.
Personally, I document everything. Email serves as the main form of communication with my tenants. Phone calls are only allowed for emergencies. Otherwise, all requests and communication are conducted via email. This creates a mild buffer with your tenants and provides some privacy. An email at 11:00 pm does not annoy me since I can respond in the morning. A phone call or multiple phone calls at 11:00 pm might make my blood boil.
A few years ago, while I was managing dozens of properties, I remember being asleep one night. My phone rang a couple of times which woke me up from my slumber. The call was from a younger guy – let’s call him John (not his real name) – who recently moved into a three bedroom apartment with a couple of his buddies. The apartment was in a great location but also located on the ground level. This meant the occasional bug or pest problem may occur.
Well, sure enough, John saw a bug, freaked out, and decided to call me. He started shouting at me and saying what kind of disgusting place is this? He questioned the cleanliness of the place I lived in and if I thought it was acceptable to have a bug in his apartment. I told him it was inappropriate to call me in a hysterical state in the middle of the night. It was the middle of the night and he saw an insect. I was livid and hung up.
The next morning, I sent a well-crafted email to the three tenants of the apartment. I informed the other two that John called me late the previous night after seeing a bug. I also stressed that they should only call for an emergency which this clearly was not. Then I was kind enough to schedule pest control to treat the place for them.
As fate would have it, the other two roommates made fun of John the next time I stopped by the apartment. They acknowledged John was a wuss and shouldn’t have spazzed over a bug. Then, the other two roommates offered me a beer. Life was great.
Digressing back to documenting everything, there are many reasons I prefer to have all communication in writing. First off, DC is a very tenant friendly state (or district). Landlords are heavily disadvantaged. If a tenant were to ever complain or take action against me, I would have documentation to support that I was responsive and attentive. Second, as I mentioned earlier, email communication provides a buffer from your tenants and doesn’t make you available 24/7.
Be responsive and communicative
As I said before, this is a people business. You need to be responsive and communicative. Tenants want to know that they’ve been heard.
For example, you may receive an email from your tenant for a repair request. Be sure to follow up with the tenant. Keep them updated on the process. Your staff or you may be diligently working to finding a solution, however, the tenant cannot see what happens behind the scenes. If they don’t hear from you for three days they may think you don’t care or forgot.
If you actively communicate with your tenants they will feel better about the process. I am a big fan of over communicating. For example, your tenant notifies you of a small pest problem at the property. Let’s also say you call your pest service but they are not available for three days. Let your tenants know the first available service call is in three days. Provide interim updates and give your tenants a reminder the day before the service will be provided. The tenants will know your team is working on a solution and actively thinking about their problem.
Always be polite & take the high road
Be polite and always take the high road. This is a people business and you want to be courteous and professional. Blowing up at your tenant may not be wise, especially if they are locked into their lease.
However, being courteous does not mean you need to grant them every request. I believe in ‘tough love’ and ‘firm but fair’. If you give a tenant an inch they may take a mile. You can be polite while keeping your backbone and not letting your tenants walk all over you.
Tenants that get under your skin
You are bound to come across a tenant that ‘gets under your skin’ if you own rental properties long enough. I vividly remember a couple of ‘high maintenance’ or ‘diva’ tenants from my career as a property manager. Even though they were annoying tenants, we still did our best to treat them professionally and with respect.
Some tenants will test your patience. Never respond to a tenant if you are annoyed, angry or aggravated. Take a moment or two to calm down and collect yourself. Don’t let them get under your skin and remember the golden rule.
Not everyone meant to be a landlord.
Being a landlord may not be for everyone, and that’s OK. Some people may not want to manage tenants. Others may find the business too stressful or time-consuming. However, just because you can’t or don’t want to manage tenants doesn’t mean you should avoid real estate.
Hiring a property manager is a great alternative if you do not want to a landlord or manage your own properties. A good property manager will take care of all the busy work. By hiring a property manager, you will not have to worry about scheduling repairs or interacting with tenants. A property manager makes owning real estate a very passive activity.