Living here, what to say to Tenant

[Mariah Monson]

My fiancé and I just purchased our first property, a duplex, and we will be living in one unit while renting out the other. I've heard it recommended to tell tenants that you are the property manager rather than the owner because it can improve your relationship and they are less likely to come after you (Note: we currently don't have any issues and don't plan to, just being cautious). 

But what do you say if you live at the same property? I feel like they are definitely going to know we are the owners. Is that okay? Has anyone had issues with that? Any suggestions are welcome. 

Thanks so much!

[Kevin Sobilo]

@Mariah Monson, a few thoughts.

1. Do you want your tenants to be honest with you? If so, then you should expect to be honest with them. Lying about who you are isn't honest.

2. In many states you have to be a licensed real estate broker/agent to be a property manager. So, its hard to lie about that to a knowledgeable tenant.

3. If your property was owned by an LLC it would be easier to convince tenants or hide your role, but as your primary residence its probably in your own personal name.

4. From a practical standpoint, add an umbrella policy to cover liability in case you get sued just to be safe.

5. Think carefully about how you will manage the relationship with the tenant. If you become too friendly as neighbors that could impact your decision making as a manager of the property. This is why people don't like renting to friends/family because its human nature to mix emotion into the decision making and that makes dealing with managing the investment messy when things go sideways.

[Adam Bartomeo]

Always be honest

[Michael Smythe]

@Mariah Monson we respectfully advise the opposite approach of @Kevin Sobilo. 

Nothing wrong with his opinion, ours is just different.

You should consider both and figure out what works for YOU!

FYI, he is spot on with his #2-5!

We always challenge people to name ONE good thing that comes from a tenant knowing you are the owner.

"Honesty is the best policy", doesn't really apply in our opinion, to the landlord-tenant relationship, as a tenant will lie to an owner in a heartbeat, when things aren't going their way. 

Never forget, "desperate people, do desperate things". 

So, when a tenant can't pay their rent, rarely do they tell the truth. Usually, you hear excuse after excuse and they try to make their problems your problems.

No matter what you decide, document EVERYTHING IN WRITING or suffer the consequences! Have a business conversation with a tenant, send them an email summary of the conversation and ask them to confirm you got it correct. BCC yourself on the email and keep as a record. If you send a text, we recommend getting a GoogleVoice number as you can save all your texts more easily.

[Mariah Monson]

Thank you for all your advice! It is much appreciated.

[Rick Albert]

Starting a business relationship on a lie is never a good idea. 

Your lease is likely have your name on it anyways.

If they are going to sue you and you go to court, I can just imagine seeing the "victim tenant" telling the judge how you misrepresented yourself to them.

You will be surprised when tenants find out you are the owner. They can often be nicer knowing they aren't talking to a property manager and knowing that the place will be kept up nicer since you live there too.

[Tim Miller]

There's a lot of good points being made for both sides. You really need to know yourself. Are you a softy? Do you feel sorry for the sad stories? Or are you able to stick to your guns and simply tell the tenant, tough crap, the lease is the lease. Either follow it or get out.

If you're the first one, soft, tell them you're the PM but my advise would be to actually get a good PM.

If you have the tough skin, no need to lie. Just lay the ground rules, stick to them and let the tenant know. You sympathize with them but the lease is the lease. Good luck!

[Gregory Schwartz]

I've been there. In my first fourplex, we planned to tell the tenants that we were the managers. That didn't feel right. 
Ultimately I've found it easier to just take ownership over any situation. Let the tenants know you are the owner and manager, be proud of that fact!