Does landlording need substantial people skills?

Question

I am single bread earner in my family while my wife takes care of kids. Few years ago I started feeling there is a need to earn more to support our growing needs perhaps with a second job but that would take away my personal time with my family .I got inspired with my previous landlord who was house hacking with a multifamily, started researching BP and started devouring every resource that came my way and took a big leap of faith and invested in my first multifamily without getting stuck in an analysis paralysis mode upon analysing few deals.While I do like the passive income aspect of a multifamily, I am feeling it's  more than second job as it consumes me so much more emotionally and taking me away from my family and I sometimes start feeling if I introduced a new problem to solve an existing problem with this multi-family investment.

I am generally a warmly friendly person but ever since I bought my first multi-family and started renting I feel like I have turned somewhat cold.

Homeownership especially owning a multi-family with tenants seems like a arduous and complex process involving complex human psychology.While analyzing the deal , making numbers work vetting the tenants etc is just one part of the equation.There is lot more to this game of real estate , I think one must be well versed with complex human  emotions. One as a landlord wants to safeguard his property after making substantial investment and the tenant wants to get the best bang for his buck and this more often than not turns out into a cat and mouse game between the tenant and landlord. The landlord can't keep the tenant happy all the time while the tenant can't stop from breaking things. I don't even want to get started with the predisposed anxieties,complex egoes and capricious tendencies of a tenant.

A landlord in anticipation of tenant breaking things need to caution the tenant and that communication even when  euphemistically put can turn out into a conflict with the tenant

Is it just me who feels that way? Should I start thinking about an exit plan?Perhaps people skills are not in my DNA  or should I start reading Dale Carnegie?

I am curious how others handle such complex matters?as I have started to feel it's just not making the numbers work one also needs substantial people skills! Appreciate feedback from other members.

Thanks

James Wise · Answer

You're too emotionally involved. What you need are systems and rules. Then there is no longer this cat and mouse game you're talking about. The tenants either follow the rules or they don't. It becomes much more simple. Check your emotions at the door. Do not try to befriend your tenants. Do not try to understand why your tenants behave the way that they do. They follow the rules, or they don't. Simple.

JD Martin · Answer

OK. Well, some thoughts:

1. At the beginning it can feel that way. Until you have good systems in place everything feels like you're starting from scratch, every time. The key is to systematize everything you can so it reduces your decision fatigue and need to revisit every issue.

2. The class rental you invest will go a long way towards engaging/disengaging yourself from your tenants. If you rent out C or lower multi-family/trailers, you are going to interact with your tenants a lot more than if you were renting out B+ single-family homes. Generally, the greater the profit level, the more you're going to work for that money. C/D class are super-profitable for those who know how to work them (I'm thinking of you @James Wise and @Jim K.) but you're not going to be invisible.

3. If you're willing to part with some of that profit, you can turn everything over to a PM company and just manage the manager.

Jim K. · Answer

Before I did this, I was a teacher. People skills don't hurt down in the low-C SFR property class. Tenants have real problems and challenges in their lives. I wouldn't get into this property class without those people skills BUT ALSO without significant handyman skills. No matter how capable you are with people, you'll just get eaten alive on maintenance costs, especially in areas with older housing stock like mine.

Peter Morgan · Answer

@James Wise

Thank you so much everyone for sharing your valuable insights. I am a newbie landlord, I made few rookie mistakes as a beginner , not buying the home at the right price point gives me little room to hire a property manager.

I am just having trouble dealing with tenants who make mountain out of a molehill nevertheless the information shared by other members in this thread is making me feel more empowered.Thank you!

Matt Ziegler · Answer

One thing that we have found helpful is to use the lease terminology when dealing with issues.

"according to the terms of your lease".....this will spell out exactly, if it is well written/approved lease contract , who is responsible for what. It also sounds official and legal, which keeps things  on a professional level.

Hope that helps...

Steve Morris · Answer

Am a broker and also a landlord.  You need to keep the relationship strictly business.  You have to follow a lot of rules (even in IA) and you screw up one thing, go to court and you'll prob lose against a tenant.  Whereas, judges give tenants a lot more "latitude".

If it helps, the one thing I learned right away when talking to a tenant - Do not say "I'M SORRY".  They just sense when you say that you can be pushed :)

Michelle Fenn · Answer

The first thing I tell new investors that have just made their purchase and rehab is to not get emotionally connected to this property it is an asset that you make money from, not your home.

This advise comes into play during renovations, and when new owners observe how others keep house.  I need to remind new owners that not all tenants will be a "neat" as they are and clutter should probably be overlooked as long as the property is not being damaged.

James Wise · Answer

Ewww gross. Definitely agree. Don't apologize for enforcing the rules. Never encourage the entitled attitude that many tenants seem to have. Shut that crap down on day one.

Parker Massengill · Answer

I agree with Matt, a good property management company will save you a lot of headaches. It will be less cash flow but that's better than no cash flow.

Matt Ziegler · Answer

sounds to me like you need a qualified property management team to handle this. Some folks enlist one of the tenants to act as an on-site manager. What you may sacrifice in cash flow, you will gain in time.

Does landlording need substantial people skills?

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