Mistakes Landlords Make, Part II
We admitted to a few moderately spectacular bungles last week — let’s do it again!
Last week, we talked about some of the mistakes that landlords make — and we’re going to keep it up this week, too. Let’s get right into it!
Dealing with Tenants
- Don’t get caught in a repair frenzy: Be careful WHO asks a tenant if there’s anything else that needs repair when you send someone to do a specific repair or upgrade. Tenants seem to always want to live in an all-inclusive resort. If the contractor you send asks the tenant, they’ll be there all day fixing stuff and you’ll get a larger bill than anticipated.
- Know your role: Remember, you’re not the handyman — you’re not even the owner. You’re the investor, and they’re the investment. So long as your meeting your legal obligations as landlord, their function is to turn a profit for you.
- Don’t forget to check up:You can’t assume, just because the rent is paid, that a tenant is treating your house well. Always visit occasionally to inspect the condition of the home.
- Check your tenants carefully:There was a point in time a while back when we discovered that we were renting to two drug dealers in two different apartments — and they were related.
- Empathy is your friend — in two ways: Not everyone is like you are — take some time and learn the ‘tenant mentality’, and then realize that sometimes, events really can, in less than 24 hours, turn a 4-year decent-job-holding regular everyday lady into a sobbing wreck who wordlessly moves to Charlotte without even telling you she left town. When someone has a huge life change that involves a family death or spousal abuse or something similar, even the best tenant can need — and deserve — some empathy.
- Just don’t get suckered:At the same time, there really are tenants out there who believe they’re smarter than you and will try to manipulate the courts and other factors against you. Keep yourself well-informed and hire a skilled lawyer, and don’t get caught with your pants down.
Dealing With Yourself
- Trust your gut: Unless you have a history of bad intuition, listen to it. We’ve had a few experiences where our gut was shouting “NO! DON’T DO IT!”, but our head ignored it. We regretted it every time.
- Don’t believe everyone who can afford a suit: There are lots of financial predators out there who will tell you that debt is a good thing and leverage is the key to big profits. Don’t buy it — profits don’t need to be big, they need to be consistent. Turning big profits for a few months and then falling into the debt trap and filing for bankruptcy is not a business plan.
- Old school isn’t always the best school: Don’t believe that the same tactics and techniques that worked a decade ago are all still viable today. A decade ago, you couldn’t count on the average tenant having access to a smartphone despite not being able to afford food — today, it’s the norm, and if you can’t adapt to that and other factors like it, you’re going to fall behind.
- There’s no honor in going it alone: And finally — don’t try to do this by yourself. We did, for the first couple of years, and it’s just miserable. Get connected, build relationships with other landlords, vendors, local government agents, and so on, and it’ll make your job incredibly easier.
If you have any stories of landlord’s mistakes that you’d like to share, the comments section is right down below — we’d love to hear them!