To Be A Landlord . . . Do It Right From Day 1!

To Be A Landlord . . . Do It Right From Day 1!

I had an amusing conversation in September with a fantastic couple from Mississippi.  They have been investing in real estate for the past 15 years and have amassed a portfolio of over 40 properties that provide a nice income for their retirement.  They had come to me for advice on managing their properties and the conversation that followed, while being serious, had all of us laughing at how backwards we can sometimes get when managing our own properties. 

I was once a landlord managing my own properties so I laugh from experience! Never Close At The Local Burger King One of the first pieces of advice I gave them was about the tone they set from the beginning.  If you want the tenant to respect your property and your authority as the owner and landlord, then you must set the right tone from the time you  meet them.  A few ways to set the right tone are:1.  Pre-qualify the tenant on the phone BEFORE showing the property.  Help them to understand that you are very busy and that you cannot simply drop everything and show a property to everyone.  They are either serious about wanting to rent the property or they are not.  If they are, set an appointment and show the property.  I would never advocate putting lock boxes on rental properties. 2.  Never be late… ALWAYS arrive early.  It lets your future tenant know that when you set a time or a due date, that you expect it to be met!  3.  Close your lease like a professional.  Never close the lease at a local coffee shop, or fast food restaurant, or the counter in the kitchen of the home and never close the lease on the hood of the trunk of your car.  I have been shocked the number of times I have heard do-it-yourself landlords talk about the problems they have with tenants respecting their process only to hear they started out on the wrong foot by whipping out a contract and signing it on the hood of the car!When I was talking with the couple from Mississippi, I mentioned that you should never close a lease at the local Burger King.  The wife began to laugh and put her head on her husband’s shoulder and he laughed as he told me that their favorite fast food restaurant in town is Burger King and they happen to close all their leases there.  We all started laughing and I told them it was purely coincidental that I chose that restaurant, but I wanted to know if they understood the message that sent their tenants. 

One of their major problems was that tenants took advantage of their kindness and seemingly low-key, relaxed operation.  They constantly asked to pay late, asked for additional work to be done to the property and they felt that, at times, they were being pushed into a corner of “do this for us or we are leaving”.  That constant threat left them feeling like the tenants were in control of their investment property and not the other way around.As we continued to talk, I asked them if they had a real estate attorney with a conference room and they said that they did.  My advice to them was to use that conference room for all of their lease signings.  It would help them to set the proper tone from the beginning and assert their position as providing a professional service to their tenant and not simply a rental property.

Read the full post here…