Do You Own the Place? Why You SHOULD Tell Your Tenants About Your Ownership
I have listened to many real estate seminars over the years where the speaker has touted the benefits of anonymity. We were told that you should never tell your tenants that you own the property. Instead, we were told to tell tenants that you work for a group of investors/owners. This would provide you with several benefits, including:
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- Keeping prying eyes from easily finding out what you own.
- Placing another “entity” between you and the tenant when disputes or questions arise.
- Giving you empathy in the tenant’s eyes since you are just working for someone else too.
Frankly, I never really bought into this idea. I incorporated my business several years ago and the corporation does hold title to most of my properties. So technically when a tenant asks “Do you own the place?” I can say no. But to me saying no was at a minimum disingenuous if not just an outright lie. So I always said yes, I own the place, and saying yes over the years has brought unexpected benefits.
First, most of my tenants are fairly savvy when it comes to technology. A few clicks on the World Wide Web would have revealed the truth. So saying yes got us off on the right foot. This can be incredibly helpful if there are ever issues later on.
Second, issues and problems with tenants tend to get resolved quickly. Tenants know who can they can call and prefer knowing who they can go to when a decision needs to be made. Tenants like this aspect of our business and tell us so, which helps with tenant retention.
Third, we have been able to build up a nice local brand name. We tell our prospective tenants that not only do we own the properties, we also live, work and play in the same neighborhood. We enjoy living in the neighborhood and hope they do to. This has been a wonderful selling point for us and has attracted good quality tenants.
So yes, you can be anonymous and depending on your business structure, investment goals, etc you may want to be. However, I have found that it was simply better to be upfront. It gets me better quality tenants, who have stayed longer and taken care of our properties.
So what is your opinion of anonymity (if you care to share it J). Do you hide behind a corporate wall or a trust? Let me know your thoughts in the comments section.