Building a Good Landlord/Tenant Relationship

3 min read
Kevin Perk

Kevin Perk is a full-time buy and hold and fix and flip real estate investor with over 15 years of experience. He and his wife Terron operate Kevron Properties, LLC, a boutique real estate investing company in Memphis, Tenn.

Experience
Kevin was a past president and is a current board member of the Memphis Investors Group. He’s also a blogger and writer who has authored hundreds of real estate investing articles on BiggerPockets and his own blog, SmarterLandlording.com, some of which have been featured on The Motley Fool and MONEY: Personal Finance News & Advice.

Kevin is also host of the SmarterLandlording podcast.

Originally from the Washington D.C. area, Kevin moved to Memphis to attend graduate school at The University of Memphis. After receiving his master’s degree in City and Regional Planning, Kevin climbed the planning career ladder to eventually become planning director of a county in the Memphis metro area. He “retired” from planning in 2003 to pursue real estate investing full-time.

Since “retiring,” Kevin’s main real estate investment strategy has been to buy and hold, otherwise known as landlording. Generally working in historic Midtown Memphis, Kevin is also known to fix and flip grand, historic homes when the right opportunity presents itself. He and his wife Terron (who is the principal broker at Perk Realty) have participated in dozens of real estate transactions in the Memphis metro area.

Kevin has the heart of a teacher and believes in helping others through education. An instructor of college-level geography for over 25 years, Kevin also regularly participates in seminars and panel discussions at such forums as the Memphis Investor’s Group and the Single-Family Rental Summit.

In addition, Kevin has been interviewed in publications such as the Memphis Commercial Appeal, the Memphis Daily News, and the Foreclosure News Report.

Education
Kevin earned a master’s in City and Regional Planning from The University of Memphis.

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The landlord tenant relationship can be one filled with conflict, where the landlord is always fighting to collect the rent and the tenants are always fighting to get things repaired or trashing the property.  Or, it can be a relationship that is professional, where standards are spelled out, procedures are detailed and rules are followed.  The choice of which one you have is up to you.

As a landlord, you set the bar for your rental properties.  You can either run them by the seat of your pants, or you can run things in a professional, business like manner.  Each method will yield you wildly different results.

The First Method

Let’s take a look at the first method.  Joe Landlord decided he wanted to get into real estate some time back because he heard he could make some good money.  Without researching anything, he went and bought several rental properties.  He got his lease from the local office superstore.  He bought a “For Rent” sign from Home Depot and inked in his phone number.  He took the first decent looking person that come along and moved them right into his property.  He thought that all he would have to do now is collect checks.

He never figured that things break, so he had little money for repairs and not the slightest idea who he could call to get something fixed.  He never figured his lack of making repairs would lead to resentment on the part of his tenant.   He never thought someone would not pay the rent.  Now he has a broken down property, an angry tenant who is not paying.  Will his lease help?  Not likely.  Leases should be state and local specific.  Will he get the tenant out?  Eventually he will.  Will he collect on the damages done?  Unlikely since there few if any move in procedures or documentation made of what existed before the tenant moved in.

Joe set himself up to fail and set himself up for a number of conflicts.  All of which could likely have been avoided had he treated his rentals a bit more like a business.  I once heard a guru say that tenants are very much like employees.  That has stuck with me for years because I believe it to be a very accurate description of the landlord/tenant relationship.  Most employee/employer relationships have policies and procedures in place to guide that relationship.  Your landlord/tenant relationship should also have policies and procedures in place to guide your relationship and reduce the chances for conflict and headaches.

The Second Method

Remember, you as a landlord set the bar for the relationship.  Set it high.  Think about what you are getting into and seek competent advice from other landlords.  Develop a lease that is specific to your area.  Have it reviewed by a competent attorney.  Develop and set of tenant screening criteria.  Develop a move in and move out procedure that ensures you get your property back in good order.

Develop policies and state them upfront as to what happens if:

  • The rent is late or not paid
  • Utility payments are not made
  • House rules are not followed
  • Damages are caused by the tenant and/or their guests.

Determine in advance what your policy is if a tenant wants to:

  • Have a pet
  • Switch roommates
  • Break the lease and move out early
  • Hold an apartment for a couple of months
  • Make partial payments due to income problems.

Having all of the above developed and discussed on the front end will make both yours and your tenant’s life much easier.  Everyone will be clear as to what is expected.

I am sure that this seems like a lot.  But it is important if you want to be successful as a landlord.  One of the biggest complaints I hear about being a landlord is dealing with the tenants.  Well, having a clear set of rules, guidelines and policies can really cut down on the conflict and provide a much smoother ride.
Photo Credit: dhendrix73