Are you a Landlord or an Investor?

Question

I read a lot of posts here on Bigger Pockets from "Investors" that are looking for help dealing with tenants. One theme I see repeated over and over is the idea that setting up a management company and using a PO Box for rent checks will somehow magically get their tenants to pay rent on time and not call at all hours of the night with ridiculous maintenance requests.

I'm a great landlord (I am, just ask me). I'm not a great investor. I don't like negotiating with sellers. I'm conservative with properties I purchase, I don't have a ton of cash.

On the other hand, all of my tenants know my cell phone number, they know where I live, and I have heard every story in the book about why they don't have their rent. I deal with each one individually. I don't send out a notice to quit on the third of every month to whichever tenants haven't paid yet. I have some tenants that go two months without paying but they call me and I see them around and they pay eventually.

I have tenants that clog toilets, break screens, dent sheetrock, you name it, I've dealt with it. I've seen it all and my tenants call me at all hours of the night.

I know when to say when. I have evicted plenty of tenants and there is no question that I am the landlord and it's a business and I make the rules.

My point is this...

You might be a great investor and you have lots of properties and you make lots of money and all is great in your world but...but...you aren't a landlord. If you think that by setting up a PO Box for tenants to send their rent checks to and introducing yourself to your tenants as the property manager as opposed to the owner, and even setting up an answering service for all phone calls is going to make things easier, you are mistaken. Rent checks will still be late and tenants will still break things. You are just creating an extra layer of insulation between yourself and the same reality that you would be facing if you were the face of your properties.

If this is the path you are going down, you really need to consider the fact that you aren't a good landlord and you need to hire a professional management company.

Don't let your tenants dictate how you run your business. Be a landlord if that's the business you want to be in. If you don't, just hire one. You will likely save yourself a lot of money and a lot of grief.

Are you a landlord or an Investor?

Bill Gulley · Answer

Both, at the same time!

A pigeon is a dove, but a dove is not a pigeon.

A landlord is an investor, but an investor is not necessarily a landlord.

I get your point :)

Linval T. · Answer

@Rob Beland

Great post with lots of meat on the bone to chew on, while contemplating which side of the fence fits the reader.

In your case, clearly you are a landlord 1st and investor second and that is solidified by your occupation announcement on BP as well.

Yes, the fact of the matter is that there are individuals who are really REI focused and are hiding behind the cloak of a landlord to sustain their income stream, while not servicing the tenants who are the lifeline of their business.

Some are called slumlords and rightly so.

My take is that you can wear both hats equally as a REI and landlord, but, landlording is more labor intensive as you know, than being a pseudo REI centric person or to put it another way, a money grabber who has no empathy for the source of funds generator......the tenant!

Nicholas Crum · Answer

I 100% agree. Currently, I work for a large investment company whom manages their own properties. I have managed a couple communities ranging from 180-300+ apartment homes and kudos to you for being a great landlord. I am transitioning to becoming a full time investor and after managing for quite some time I would rather hire it out. With that said, I also run my numbers to include the management fee. Some people can be both the landlord and an investor but there will come a point when they need to decide where there time is more valuable. Being a landlord is a full time job when enough properties are required. Questions is, which direction will people want to go?

Landlord or full time investor?

Great post.

Landlord or full time investor?

Great post.

Marcia Maynard · Answer

I identify with being a Landlord. As I learn more about real estate investing and engage in building our portfolio, I also see myself as a Real Estate Investor. As I use my property management skills, I see myself as a Property Manager.

@Rob Beland, I appreciate what you said, especially about being the "face of the properties." We too own and manage our residential rental units. This is certainly a people oriented business when you work on the front line. I don't shy away from the Landlord term because it is the term used in Landlord-Tenant law. I am the landlord/owner/manager and we serve the tenant/resident.

By maintaining a service approach and concern for the greater good of the community, we play a valuable and important role. By doing so with keen business sense we also are securing our financial position, for now and the future. Real estate investing is part of my retirement plan and adds to my net worth. Landlording with integrity adds to my joy and allows me to be a positive influence in the lives of others and also gives me a sense of purpose.

Ben Leybovich · Answer

I agree :)

Rob Beland · Answer

Great point @Nicholas Crum. I have 26 units and Id like about 50 total and I feel I could comfortably self-manage at that level. Beyond that I would bring in a PM. Im always going to be the face of my properties I just recognize that at some point I will need help.

Are you a Landlord or an Investor?

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