Unconventional thoughts on landlording

Repost from 1/31/10 entry at my blog GoodFaithInvesting.com

I don’t blog much about my landlord experiences, but a conversation I recently had with an investor from St. Louis (with 30+ years of real estate investing experience) inspired this post. We were talking about our philosophy regarding landlording and it was a breath of fresh air to speak with someone who shared a similar perspective.

Before I go into my unconventional thoughts, it may be helpful for me to disclose a few things:

• We have not owned (and have no future plans to own) rental properties in war zones – low income neighborhoods, yes. War zones, no.

• We’ve had both deadbeat tenants (had to evict them) and wonderful tenants

• We’ve had both Section 8 tenants and non-Section 8 tenants. Our preference is to have Section 8 tenants who are responsible for a healthy percentage of their monthly rent.

So here’s my take on being a landlord — and I can tell you by the looks of the neighborhood of our most recently purchased rental property (as well as from conversations with the leaders within the neighborhood), that these thoughts are unconventional:

I’m a firm believer that you reap what you sow.  If I choose to be an excellent landlord, I will attract and keep excellent tenants.  To me, being an excellent landlord means:

• Rule #1: Treating my tenants like human beings instead of an income stream — showing that I care about their well-being, comfort, and safety in my home (this rule applies regardless of whether the tenant is receiving government assistance or not — doesn’t matter).  Doing small things like sending holiday cards or leaving a voicemail to say hello every once in awhile!

• Rule #2: Ensuring that the home looks nice — just because my tenant may be a Section 8 tenant, I will not assume that the person will treat my home in a sloppy manner.  I present a home in excellent condition and expect excellence in maintenance from my tenants.   If I present a home in sloppy condition, my tenant has no reason to believe that I have any pride in the condition of the home and may show the same blatant disregard.

• Rule #3: Being willing to do select low-cost upgrades within the home as the tenant proves to be an excellent one — simple things like decent window treatments or a low-cost security system

• Rule #4: Providing instructions on home ownership/maintenance — giving tips on things that a tenant may not know how to deal with if they’ve never lived in a home before

• Rule #5: Refusing to be a completely “hands off” landlord even with a property management company in place — I need to know not only that business is being handled the way I want it to be handled, but also that my tenants are being treated with respect.

Even when the Housing inspector came to our property before the tenant moved in, she commented on how nice the home was and how any tenant would be lucky to stay there.  It’s not like we did much special to the place…we made sure it was clean and in nice condition! What does that tell you about how many other landlords in the area are treating their properties/tenants?

My husband and I have plans to make a significant difference in one or two lower income neighborhoods in our county over the next 10 years and the great news is that we’ll do well (financially) by doing good (for others).  It’s a win-win!

Anyway, that’s all I wanted to share.  Never forget that you reap what you sow.