The convert Landlord

[AL-Teef Jones]

Hello BP,

I have a question, when it comes to strategy for house hacking a multi-family in New Jeresy. I was discussing with one investor where they advise me:

 "if you're going to house hack and occupy a unit its best that the tenant does not know that you're the landlord. this avoids receiving the sob stories for late payments, getting wrapped up in possible tenants drama, and you can access the tenants behavior w/out them putting on a front because the landlords around." 

I do see some of the advantages of this strategy but originally I was fine with my tenants knowing that I'm the landlord because I'm confident that I can and will screen and vet the applicants well.

What do you guys think of this strategy? Can you efficiently screen and vet a potential tenant while still living in a unit covertly without them even knowing you're the landlord? 

[Billie Miller]

When we house hacked, our tenants knew we were the owners. They didn't really care and we stayed out of their business. I think if you're comfortable with it and your screen your tenants well, it shouldn't be a problem.

I think reducing sob stories and tenant drama has more to do with how you screen your tenants and how you "train" them so to speak. Check out this blog post:

https://www.biggerpockets.com/renewsblog/2014/04/0...

I have heard of house hackers telling the other tenants that they are just the property managers, not the landlords. However, if you are completely hands off (like you hire out everything from rent collection to lawn care), it might not even come up.

[Matt B.]

@AL-Teef Jones I smell a possible lawsuit coming your way for not identifying your self as the owner. I'm not an attorney nor have I ever done anything like that but I can totally see a tenant your trying evict coming to the court room claiming deceitful practices because you pretended to be a common neighbor meanwhile you were the owner. Just food for thought. This may not be an issue at all but I would hate to read about you loosing 6 months of owed rent in a court room. 

Also, how would you get around this? an LLC? My tenant writes me a check in my name so i don't see how they wouldn't put two and two together.

[AL-Teef Jones]

@

Thank-you for the article! That's what I've been think it all depends on how well they're screened and vetted in the beginning.

@

Matt Bacenet

I honestly don't see how this would work in the long term it would be way to much unnecessary work to play ninja landlord and wouldn't be worth it. Just wanted to get some feed because it was my first time hearing of such a strategy.

I do plan on trying to make my rent receiving as automatic as possible tho.

[Ben Leybovich]

That's idiotic!

[James McCard]

I have heard of people doing what you suggest however - I am a hands on landlord. If you are living in the property it will be difficult to keep up that charade. 

[James Lanier]

From my experience it is much more beneficial to be a hands on landlord that they know. If you are good at it, then the good tenants appreciate it. I'm not handy at all, but I make sure problems are addressed and concerns are answered personally by me. Now I only have one property for now so my involvement could change in the future, but as of now my personal involvement has turned the whole property around  and increased value.

[Louise A.]

@AL-Teef Jones

One other benefit that hasn't been mentioned is that if you disclose you're the owner, you'll get better tenants.  Bad tenants do NOT want to live beside the owner of the property.  

Just don't become friends.  

[Thomas S.]

If sob stories and tenant drama are a issue you are likely not cut out to be a landlord.

A good landlord ignores those types of issues and teaches their tenants you are not interested in hearing about their personal life and problems.