I'm finally a "mean landlord"

[Dave Poeppelmeier]

This post is for the new and newer Investors out there. When we start out as Investors, most of us want to be the great landlord we never had: one that fixes everything quickly, who is super nice, and wants to make life supremely enjoyable for our residents. We want to make the world a better place! When we have 1, 2, 3 rentals, we can easily do that. But guess what happens as we continue to grow: the Law of Large Numbers starts to rear it's ugly head, for better and for worse.

As we continue to rent our houses and units out over time, we are going to be interacting with many new people. These people you will not be able to get to know as well, because you have 10 houses now and not 2. You have your screening procedures in place, but you let someone in that almost meets your criteria. They have a great story about getting back on their feet, they love the house, they want the school district, etc. You have now encountered the Professional Resident. The resident that know all of the rules of the leasing game, what you as an Owner can and can't do, and actively seek to be a pain in the rear. You are getting maintenance calls every week, some legitimate, some not, some they caused on purpose. Rent is late, they almost pay all of it, but it's not too much of a balance. Before you realize it, rent has stopped coming in, they are not responding to communication, and now you start the eviction process, which in places like CA and NY, is darn near impossible to get someone to leave. 

You ask yourself "what happened???" You realize that you were too nice. Next time, you're going to stick to your screening procedures! That goes well for a while, but then you buy another house with residents living there, and a week before closing they give their 30-day notice to vacate. No problem, they said they'll be out at the end of next month. The end of the month comes and one person has moved out, but the other needs a few more days to get their work to relocate them out of town. Sure, no problem, just pay the prorated rent when you move out and that will work out fine. The only problem, is now that resident has let his brother come stay with him for a few days, and now he thinks he's renting the place and won't leave. You now have a squatter! Guess what you get to do? Go through the eviction process because he knows you can't simply call the police for trespassing, he as stuff there! He's living there, has a key, and says see you in court. 

Yes, both of these situations happened to me, along with many others along the way. Most of us want to be generally nice to people, believe in the Golden Rule/Karma/Law of Attraction/etc. Unfortunately, there are a lot of people out there that don't play by those rules. There are people that will take advantage of any little thing they can get their hands on, including your benevolence. Looking back at all of the situations I've been involved in, it's because I deviated from solid rental business practices in the name of "being nice" and "trying to help someone out". 

Now, should we be the Landlords from Hell that are all over our residents for every little thing they seemingly do and assume everyone is out to get us? Of course not. That would be bad ju-ju for sure. We can (and should) be genuinely nice and polite, and provide good service as property owners. But we have to do so in the space of our lease and the law, and no further. Fortunately, I'm big enough now that I have Property Management to handle all of this, but if I were starting over or managing my portfolio for myself, I would be "mean". By that I mean operating to the letter of the lease all the time. If they are late with their rent, they are late with their rent and they pay the late fee. If I'm sure they (or their kids) did something to the property, they are liable. Or, if they are going to be able to pay rent on the 6th instead of the 5th, put everything IN WRITING via letter/email/text, and if they don't follow through, charge them the late fee. 

It's tempting and easy to let things slide and be the "nice guy/gal" to avoid conflict. Don't do it. If you can't do that: do NOT manage your own properties. You will pay more money getting taken advantage of than you're going to pay for a good property manager. There are hundreds of articles and threads on here about how to find a good PM so I won't bore you with that. 

Bottom line: This is YOUR business, and you need to look out for YOU first. Outside of your rent and maintenance of the property, your residents don't owe you anything, nor do you owe them anything beyond your owner responsibilities, But, if you do your job right, the right people will tell others about you, especially in small towns or markets like Student Housing. I hope this helps, and please drop other instances where you were "too nice" and how it turned out. Good luck!