The Christmas Duplex: Defining the Landlord-Tenant relationship

OP

Handyman · Pittsburgh, PA · Member since 2018 · 5k+ posts · 13k+ votes

5y

@Nathan Gesner

Fair enough. I've been thinking about this one for a while, Nathan, especially as it relates to you. Would you say that most of the tenants you place are fundamentally damaged in some way with significant emotional/mental/personal problems that they're trapped in? Because most of mine are (as am I, I always have to admit), and they really don't have a chance of understanding the landlord-tenant relationship in business terms. They hate math, they despise economics, they believe wealth is inherently evil. They always cast themselves as living and working for finer things than crass, filthy lucre. The one I'm working on getting rid of right now used to do counseling and called herself "a toucher of souls."

It seems to work better with my people to turn it into a high school biology class discussion. FYI, I've also tried to turn it into a medieval history discussion, with the feudal idea of lord and retainer. THAT ABSOLUTELY NEVER WORKS. Because in that discussion, the tenant who doesn't make a living through the property is just a peasant serf expected to work the land for his lord or be whipped for laziness, give his his bride to his lord on his wedding night, and drop dead swinging a hoe or pickax in the lord's fields.

Bill F.

Investor · Boston, MA · Member since 2015 · 1k+ posts · 3k+ votes

5y

@Jim K.

I think using a variety of models to think about things can only bring further insights that you didn't have before. The only danger is applying the wrong model or trying to overfit, but I don't see that happening here.

In fact I think looking at the LL/Tenant relationship this way gives you an edge over most. At the end of the day, business is conducted by people and those people are the results of millions of years of biological pressures. To ignore one of the major areas of study because "it isn't business" misses the point. Business is a collection of other fields of study, economics, anthropology, psychology, math, biology, physics, ect. Having a fundamental understanding of the basics of core subjects can only help your overall understanding of business.

Getting to your original point about symbiosis/cooperation, some have said if you had to pick one idea that explained all of humanity, that would be it.

“All organisms are constrained in their adaptability at some point, and symbiotic relationships allow them to extend their inherent adaptive capacity to exploit new resources and environments or adapt to their own environment as it changes.”1

If we take the above to start, I agree that the LL/Tenant relationship fits that to a T. But why stop there? How about extending it further? Investor and Bank, Landlord and Property Manager, Agent and Investor... I'm hard pressed to think of a RE relationship that isn't grounded in cooperation.

Connecting the dots, when the phrase gets bandied about here about "building your core four" and "win-win" relationships, what folks really mean, under layers and layers of summary, simplification, some marketing mumbo jumbo is: work with people extend your inherent adaptive capacity to exploit new resources and environments or adapt to your own environment as it changes. The former sounds better on podcasts, but those that understand the latter have a much better chance of long term success in REI.

Excellent idea Jim and thanks for starting this thread!

OP

Handyman · Pittsburgh, PA · Member since 2018 · 5k+ posts · 13k+ votes

5y

@Bill F.

It made sense, Bill, given this tenant. The biology metaphor was what she understood. Precious little else gets through. Especially when it comes to money.

1. She believes her former landlord told her that she could pay $25/month on a $5K debt with no interest until it was paid up. That's 200 payments and almost four years of an interest-free loan. The former landlord flatly denies this, but she will stick by her crazy entitled story until the Second Coming.

2. Not only did she screw her former landlord, but her landlord before that was one of the most famous pizza restauranteurs in Greater Pittsburgh. Pizza Man had to evict her with a judgment for $3K. So for the last eight years, this woman had had a very clear history of rental debt and neglect to pay that debt. Two landlords: one evicted, one sold the place to get away from her, $8K combined debt. And this woman comes to me with $60 to pay rent IN HER FIRST MONTH and promises me "it will never happen again." Should I bring up the $2000 credit limit she defaulted on 2017? Doesn't matter. she insists I can trust her with absolute conviction and certainty that I will, and when I point out that it'll be a cold day in Hell before I do, her eyes cross briefly and she starts to whine, helplessly: "I don' unnnnneeeerrrrstaaaaannnnn'..."

I could try to explain business relationships to someone like this all day long, and it would go in one ear and out the other. Nature, red in tooth and claw, is what does it. Nature gets her spaced-out eyes to focus. Being called a parasite gets her on the phone to her family to get some money to cover her delinquent rent.

Bill F.

Investor · Boston, MA · Member since 2015 · 1k+ posts · 3k+ votes

5y

@Jim K.

That's another great point: communicating to your tenants in a way that they understand. If I want something done, it is on me to make sure the people you work with have the info presented to them in the most effective manner.

That reminds me of the story about why some think the first few months of LBJ's presidency were chaos. JFK could read at some absurd rate with nearly total comprehension, so all of his staff would write up one pagers on issues and he'd plow through them and make a decision.

LBJ like to communicate verbally and he didn't tell the staff/ they didn't figure that out so they'd send up their nicely typed one page documents, LBJ wouldn't read them, they'd walk in expecting a decision assuming LBJ knew what they had wrote, and when he had no clue, because the memos had piled up unread, things ground to a halt.

Neither is right or wrong, but just different, and the communication style has to fit the people involved. Seems like you found the means that works for that particular tenant and that is a skill that is hard to do, especially when you only meet/contact tenants for brief periods of time.

OP

Handyman · Pittsburgh, PA · Member since 2018 · 5k+ posts · 13k+ votes

5y

@Bill F.

THAT's the LBJ story you think of when you're thinking about LBJ's communication issues?

LBJ would corner men he disagreed with in the bathroom, whip out Jumbo and swing it around, and scream at them. "Look at that! Look at that! You ever see anything that big?" He'd then stuff if back into his pants, walk away and nine times out of ten, the guys he exposed himself to ended up doing things his way.

He communicated with the male politician s---birds of his time in a way they understood and respected.

Dennis Wayne

Member since 2020 · 339 posts · 356 votes

5y

I guess for me it’s less philosophical reasoning in mind , I don’t try to understand them or even believe what they say . I honestly stopped caring , I just follow my protocol and throw them out after they have failed to honor their obligation. I’ve been lied to and lost so many thousands that at this point I don’t trust a word they say . I expect them to try to take advantage of me that’s why I am three steps ahead of them at all times

OP

Handyman · Pittsburgh, PA · Member since 2018 · 5k+ posts · 13k+ votes

5y

Originally posted by @Dennis Wayne:

I guess for me it’s less philosophical reasoning in mind , I don’t try to understand them or even believe what they say . I honestly stopped caring , I just follow my protocol and throw them out after they have failed to honor their obligation. I’ve been lied to and lost so many thousands that at this point I don’t trust a word they say . I expect them to try to take advantage of me that’s why I am three steps ahead of them at all times

Dennis, does it help if, when you talk to them, you always make it about "Us versus Them"? Does that cut down on their bad behavior?

Planning three steps ahead of most C- class tenants is really not that difficult, as they can't plan their way out of a paper bag. Feeling morally superior to most of them doesn't take much effort or expense. Words like "honor" and "obligation" start getting pretty fuzzy when the money they spend isn't money they worked for (Section 8 vouchers, LIHEAP payments, SNAP foodstamps, disability payments, charity grant money).

What I'm talking about is finding a slightly different way to communicate, one that has in the past, for me, cut down a bit on the shenanigans.

Dennis Wayne

Member since 2020 · 339 posts · 356 votes

5y

Originally posted by @Jim K.:

Originally posted by @Dennis Wayne:

I guess for me it’s less philosophical reasoning in mind , I don’t try to understand them or even believe what they say . I honestly stopped caring , I just follow my protocol and throw them out after they have failed to honor their obligation. I’ve been lied to and lost so many thousands that at this point I don’t trust a word they say . I expect them to try to take advantage of me that’s why I am three steps ahead of them at all times

Dennis, does it help if, when you talk to them, you always make it about "Us versus Them"? Does that cut down on their bad behavior?

Planning three steps ahead of most C- class tenants is really not that difficult, as they can't plan their way out of a paper bag. Feeling morally superior to most of them doesn't take much effort or expense. Words like "honor" and "obligation" start getting pretty fuzzy when the money they spend isn't money they worked for (Section 8 vouchers, LIHEAP payments, SNAP foodstamps, disability payments, charity grant money).

What I'm talking about is finding a slightly different way to communicate, one that has in the past, for me, cut down a bit on the shenanigans.

Well I can appreciate that .in my experience Giving folks the benefit of the doubt or having a big heart , concern for low IQ or mental health in c and d class properties is a sure way to fail . I usually approach it like this : I tell them “look I’ll work with anybody who has a plan but just not paying isn’t a plan . “

Bill F.

Investor · Boston, MA · Member since 2015 · 1k+ posts · 3k+ votes

5y

Originally posted by @Jim K.:

@Bill F.

THAT's the LBJ story you think of when you're thinking about LBJ's communication issues?

LBJ would corner men he disagreed with in the bathroom, whip out Jumbo and swing it around, and scream at them. "Look at that! Look at that! You ever see anything that big?" He'd then stuff if back into his pants, walk away and nine times out of ten, the guys he exposed himself to ended up doing things his way.

He communicated with the male politician s---birds of his time in a way they understood and respected.

HAHAHAHA! Well if that's the route you want to go with LBJ stories... I like how before he would talk with people on his ranch he'd take people for a drive around, but he had one of those Amphicar. He'd drive on the road leading to the lake and casually ask the Secret Service guy if they got the brakes fix. When he said no, LBJ would make feign panic, mash the accelerator, and drive right into the lake.

That's how you play the long game to gain a psychological advantage! And Chris Voss never event mentions it in his negotiations book...

Brianne Leichliter

Rental Property Investor · Cincinnati, OH · Member since 2019 · 59 posts · 77 votes

5y

Great post @Jim K. I would agree with you. There is a balance most definitely. I have a similar experience with inherited tenants as well, although not payment related. Luckily they were on a month-to-month, so I could terminate the relationship. Still ended in eviction, but well worth the experience.

When I think about the "business relationship" terminology, I think it does still apply here, but I look at it differently. Signing a lease (the contract) enters into a business relationship. The contract is what keeps the relationship balanced and what the tenant agrees to. If they break that contract, we're out of balance and it needs to be corrected.

Love your biology analogy. It's great and I do agree.

OP

Handyman · Pittsburgh, PA · Member since 2018 · 5k+ posts · 13k+ votes

5y

@Brianne Leichliter

I like that, that's thoughtful, Brianne. You sign the contract, you're in a business relationship. And all relationships, business or otherwise, are based on mutual trust. As I alluded to earlier with @Nathan Gesner, who will likely be the first person I call if I ever get into long-distance rentals, when you self-manage a small group of C-class properties, when you're involved in Section 8 housing and everything that implies, communicating with the tenants is paramount. Generally, with the level of psychological trauma these people have suffered in their lives, an enormous amount of that communication is nonverbal and the rest of it is is more firmly rooted in emotion than reason. It takes time to connect with them. You can't keep it all bloodless and at arm's length.

Which brings up @Bill F.'s extremely salient point about Chris Voss's book, "Never Split the Difference." There's only so much a hostage negotiator can teach you about maintaining landlord-tenant relationships for years.

Colleen F.Pro Member

Investor · Narragansett, RI · Member since 2013 · 8k+ posts · 4k+ votes

5y

I guess that works, telling the tenant hey if you don't pay you are a leach which is essentially what you are doing. True but you still have to deal with the view of some tenants that you have enough resources for them to leach off of. Basically people hear what they want to hear and say what they think you want to hear (when they are indicating they won't pay). Confronting them with reality sometimes doesn't work. Like the blank stares the tenant made when I said but you just got your stimulus checks on top of social security and you are telling me you still can't pay? For communication on this front I find less is more. And laying out that you can't afford the property may be part of that communication. Reframing may have some advantages in them understanding the point. There is still the basic issue for the landlord is when they can't pay there is an inability to leave the contract as easily as other relationships. and the tenant knows that, you can't repossess a house like you repossess a car.

Brianne Leichliter

Rental Property Investor · Cincinnati, OH · Member since 2019 · 59 posts · 77 votes

5y

@Jim K. completely agree. I am actually a Section 8 and subsidized housing landlord. The right type of communication has been the key to my success with those types of tenants as well. I still hold them tight to the contract, but how I communicate is tailored to the person. Those parasitic tenants are the absolute worst though. I luckily only have dealt with them through "inherited" tenants and they usually immediately get a notice to vacate upon closing.

Matt Ziegler

Rental Property Investor · Colorado Springs, CO · Member since 2020 · 433 posts · 284 votes

5y

@Jim K We try and be friendly but not friends with our residents. We have had some real interesting folks that we have inherited over the years. Treating people as you would like to be treated, fairly and honestly, and most importantly in accordance to the "letter of the law" which is the lease.

I agree that you need to modify your communication style to match the person you are dealing with, but in the end, honest, straight forward communication is best.

All these folks that we get to serve teach us some great lessons on this journey.

Best of Luck, Cheers.

OP

Handyman · Pittsburgh, PA · Member since 2018 · 5k+ posts · 13k+ votes

5y

Originally posted by @Colleen F.:

I guess that works, telling the tenant hey if you don't pay you are a leach which is essentially what you are doing. True but you still have to deal with the view of some tenants that you have enough resources for them to leach off of. Basically people hear what they want to hear and say what they think you want to hear (when they are indicating they won't pay). Confronting them with reality sometimes doesn't work. Like the blank stares the tenant made when I said but you just got your stimulus checks on top of social security and you are telling me you still can't pay? For communication on this front I find less is more. And laying out that you can't afford the property may be part of that communication. Reframing may have some advantages in them understanding the point. There is still the basic issue for the landlord is when they can't pay there is an inability to leave the contract as easily as other relationships. and the tenant knows that, you can't repossess a house like you repossess a car.

I give every single person who's getting into local low-income landlording the same advice. Do NOT outdress, outdrive, outcrib your tenants. You need to look clean and presentable when you talk to them, not affluent. Your ride cannot be miles nicer than theirs. And you have to live in housing that is not much better than what your tenants have.

Otherwise, yes, they're going to think you have more than enough money for their remora heads to fasten on to you. And some of them have been so carefully trained out of any semblance of shame that nothing will make an impression on them: you exist as a landlord, you're there to be ripped off.

Max T.

Investor · Philadelphia, PA · Member since 2015 · 3k+ posts · 3k+ votes

5y

@Jim K. I like it. I have easy yuppie tenants who don’t give me many problems. But some have been abused by previous landlords. Maybe it was security deposits or general neglect. I try to show them that I’m responsive and care about the property and it seems to win them over in the long run.

OP

Handyman · Pittsburgh, PA · Member since 2018 · 5k+ posts · 13k+ votes

5y

Originally posted by @Max T.:

@Jim K. I like it. I have easy yuppie tenants who don’t give me many problems. But some have been abused by previous landlords. Maybe it was security deposits or general neglect. I try to show them that I’m responsive and care about the property and it seems to win them over in the long run.

I currently have one set of yuppie tenants, and it's really nice. The rest are...well, lower C-class.

Colleen F.Pro Member

Investor · Narragansett, RI · Member since 2013 · 8k+ posts · 4k+ votes

5y

@Jim K. that s good advice but for some tenants it doesn't matter what you wear or drive just owning another house you can rent to them is enough to make them think you are well enough off they can forgo their rent and coast. And that is true for any class of property. It's like the difference between picking up that phone you found on the street and pocketing it or returning it to the owner. Its a mindset that is often hard to change.

OP

Handyman · Pittsburgh, PA · Member since 2018 · 5k+ posts · 13k+ votes

5y

Originally posted by @Colleen F.:

@Jim K. that s good advice but for some tenants it doesn't matter what you wear or drive just owning another house you can rent to them is enough to make them think you are well enough off they can forgo their rent and coast. And that is true for any class of property. It's like the difference between picking up that phone you found on the street and pocketing it or returning it to the owner. Its a mindset that is often hard to change.

That IS completely true. No matter what you do or say, no matter how you behave, there are some tenants who think it's their life's duty to screw you over. Nothing will reform them. But that's a small number, thankfully, even down here in C'class, and they don't acquire that mindset immediately, but as they put together a history of renting that's very evident on a background check.