Hi Folks,
Did you know that, the more of an asshole you become towards your non paying tenant, the more of an asshole they will become towards you?
This post is going to spark some controversy no doubt.
If you are someone who is looking to buy your first rental property, one of the things that probably freaks you out the most is non paying tenants.
Over the years, I have talked to a lot of new real estate investors. Two of the things that make people very afraid about investing in real estate are:
1) Non Paying Tenants, and
2) Property Management
If you purchase a rental property, and hold that property for any gs rolex day date 118135 36mm mens automatic watch length of time, no matter what Country or City you are located, chances are that eventually you will encounter tenants that are late with their rent.
Like many real estate investors, if you expand your portfolio by purchasing more than one rental property, you increase the likelihood that you will have tenants that are late with their rent.
Most experienced real estate investors and educators will tell you that when a tenant is late with their rent, you have to be very strict with them and lay down the law.
Many say that if tenants are even one day late with their rent, you should send a notice for eviction.
Well, in my opinion, that is a big pile of Bullplop!
I bought my first rental property 7 years ago, and only 7 years later I figured out something very important.
I have discovered that when it comes to the vape Líquidos collection of rent, that:
“the more of an asshole you become towards your non paying tenant, the more of an asshole they will become towards you.”
There is much more to this of course, however, for this post, I want to keep you with these wise words…
Once again, they are:
“the more of an asshole you become towards your non paying tenant, the more of an asshole they will become towards you.”
In part II of this blog post I will share with you my findings on how NOT to be an asshole landlord when it comes to the collection of rent.
Now…Enjoy this very funny video of Pearl The Landlord.
[youtube]http://www.youtube.com/watch?v=9OVt7xEZHxo[/youtube]
ps: If you are looking to buy your first rental property, sign up to my blog today. Simply enter your email address in the top right hand corner of the blog. You will receive tips from experienced real estate investors on how to buy your first rental property!
Hi Neil, good post and congratulations on stepping up…most business people do not understand the importance of their customers because they lose sight of why they are in business in the first place. They focus on the almighty dollar and ignore service etc. in Real
Estate, landlords have a similar problem…and I find that its sometimes worse because they don’t see their real estate AS a business…that means they don’t see their tenants as customers. Some “say” they do, but “expect” tenants to fill their property and therefore resist treating them with full respect.
I recently had a similar issue with non-paying and the tenant even told me he would no longer reply to my email…instead of backlashing I STEPPED UP my team to go in and be right on top of any requests they had, no matter how dumb we thought they were. He pays late still, but always let’s me know by email (again) and has no issues paying a late fee because he knows the ‘rule’. I respect his ‘rules’ (my obligations) by fixing what he needs and he respects mine also. It’s standard business and I’m an advocate of teaching real estate entrepreneurs the “ins & outs” of how to do real life business with their real estate portfolio.
Wise words, Neil.
I’ve spent years both as a hands-on landlord and “managing the management” type. Either way, the owner-tenant relationship goes both ways. At core, we’re all human beings (though some have actually come close to crossing that fine line), and most of us want to enjoy mutual respect. And, when it comes to late-paying residents, there is most often a legitimate reason for their delinquency. What’s more, a bit of effort for genuine dialogue with this tenant will likely go a LONG way in reeling this tenant back to good standing.
While it is always necessary to listen to your “Spidey senses”, wary of being used by “professional tenants”, this is relatively rare. Look for a common theme, listen to your tenant, and work out a repayment plan for the delinquent balance. Perhaps change the payment date, or even allow for a near-term moratorium (ex, tenant is a week away from starting a new job and will soon be earning again, etc).
Through all of this, consider YOUR COST related to the process of eviction – both hard and soft. Eviction expenses and loss of rents alone are significant enough to the meticulous landlord’s budget, while the intangibles, like opportunity cost, are also at play. Then, of course, there are new repairs, clean-up, painting, etc, which must be dealt with upon tenant exodus. Oh, and be sure you have your owner-supplied appliances bolted down, because if you are that ASSHOLE landlord your tenant may not hesitate to make it hurt a bit when they leave on a sour note!
Live and learn!
Vince
Vince,
This was a great comment.
I can tell you have lot of real world experience.
Thanks again for the very insightful comment!
All the best,
Neil
Great post. I don’t necessarily believe with the first comment above that the tenant is your “customer.” The customer in this case is NOT always right! However, to an extent you do have to be flexible. Don’t be too much of a pushover -make them pay the late fee – but keeping a good tenant/landlord relationship is important.
It’s always my friends and family that do not have (and NEVER had) a rental property that like to tell me how much of a hard ass they would be and how “I do it all wrong, and THEY would have evicted so and so tenant a long time ago, and blah blah blah.” All that tells me is that THEY don’t know anything about landlording! Anyone who HAS tenants and collects rent, knows that tenants WILL BE late sometimes. It’s part of the game. Keep extra money set aside for tight times… Once you take the gloves off and become an asshole, you give them justification that it’s ok to be an asshole back. At that point, nobody wins!
ilir,
I agree with your comment about NOT being a push over. If a landlord is perceived as being a push over, they are in for trouble. As you know, you have to be respectful with your tenants, however, if they do not keep their side of the bargain, you must take action!
Thanks again for your comment.
All the best and keep in touch!
Regards,
Neil
Sometimes you have to be strict so that people will respect you. In business you should be nice to everybody especially to your clients but sometimes they tend to abuse it so better to implement a policy and rule in your business in to succeed.
Hi Krista,
Thanks for the comment, I agree. I still feel that one can be very nice to tenants as a landlord. If things go sour between the landlord and tenant, it is the local Landlord and Tenant governing body that does all of the ‘dirty work’. So you can even look at it as being a ‘good cop’, ‘bad cop’ situation.
You are the ‘good cop’ and the local Landlord and Tenant Board is the ‘bad cop’!
Hi Neil,
I enjoyed your post and I agree with you – “You get what you give”. Treat your tenants with kindness and respect and they will do the same for you. Maybe not right away 🙂 but it will come. We had some tenants that were frequently late with their rent, usually by a few days depending on pay periods. I cut them slack because they were awesome tenants otherwise and took great care of the property. They stayed for 4 years and other than that small inconvenience, they were very low maintenance and very respectful of our property. Had I been a hard ass in the beginning I know the relationship would have turned sour and I would have never had such long term, low maintenance tenants.
Hi Shannon,
Thanks for the comment. As you know from your own experience, it is a fine line between being really nice and laying down the law as a landlord. Like you, I have learned that I can be who I am, by being really nice to my tenants. That is who I am. However, when rent is not paid, you as a landlord have to follow the process outlined by the local Landlord and Tenant Board. If you do, you will always end up as the ‘winner’.
Thanks again for your comment!
Regards,
Neil
I just bought my first rental we showed the video to our tenant he thought it was very funny but the point was made
He was late for the first month but told us he would be late
My wife said to not be an asshole and then on the 16th paid the April rent but also paid over half of the next month
We don’t have a penalty yet on the lease
I wait for the email to learn how to get better in this trade
Thanks for the info
I agree with your point about how you treat others is how they’ll treat you. Granted, if you’re a landlord, you’re going to be faced with some fairly challenging circumstances. You want to be firm, but definitely not a pushover. It’s definitely not a job suited for everyone. I think if your tenants see you as a businessperson rather than someone overly friendly that they can walk all over, that is a good start. It also helps to be firm from the get go, when papers are signed, but don’t be afraid to smile! Generally an approach like this makes for a better landlord-tenant relationship.
Andre,
I agree with your comment.
I can tell that you have experience based on those comments.
Thanks again for reading!
Regards,
Neil
Hi Ilir, If you’re tenant is not your ‘customer’ who are they? I don’t recall saying the customer is always right – however as a business owner, everything depends on how YOU react to the situation – you can’t control anyone or anything else, you just control how you react.
I’m not sure how many businesses you’ve owned, but when I approached my real estate investing like my other businesses in terms of ‘customers’, marketing, ’employees’, policies and procedures the ‘chaos’ and landlording part was not an issue.
I don’t consider myself a landlord, I’m a marketer who happens to own a few businesses, one of them being properties that I own for building wealth while supplying immaculate living accommodations for people that need an immediate ‘frustration’ solved.
Joey, I like how you’ve marketed to the “frustration” market. Sounds like you’ve got yourself a niche there with people who just want to have their own space right now, and not have to worry with all the hassle of looking and moving in to a place that needs immediate upkeep.
Starting off that way already builds good rapport with your tenants – I’m sure they see you as very accommodating and a bit of fresh air to their frustrating circumstances.
Hi Pacific!
I work with people that are NEEDING a great place to live, the upkeep is actually from them because I care over the top for my customer.
When I’m talking about customer ‘frustrations’, it’s marketing to their needs, wants and desires, and not just about another ‘place’ to rent.
Entrepreneurs are overlooking the major component of marketing; which is “talk to the emotion” because whatever your customers’ emotions, you will do much better than competing on everything else, such as price.
All my properties are the highest in rent pull in their respected areas because of this marketing 🙂