Calling myself the property manager vs. landlord

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Calling myself the property manager vs. landlord

Thom S.
Palm Springs, CA · Member since 2014 · 10 posts · 6 votes

I'm a newbie investor, with one SFH that I'm currently in the process of renting out. I've seen on BP and in a couple of books that some experts present themselves to tenants as the property manager, not the landlord. That makes sense to me, so as I've been showing my property that's what I did. Several of them have asked me outright if I was the landlord, and I evaded the question, but the impression I gave was that I'm not the landlord/owner.

So here's my question: when it comes time to pay me, aren't they going to have to put my name on the check? I clearly didn't think this through, and now I'm worried that I'll have to cop to the misdirection. Can anyone help here? I'm already in the thick of things, so I don't feel like I'll have time to create an LLC or some other business entity out of thin air. I'm kind of embarrassed to even ask the question, but I'm hopeful that someone out there can steer me in the right direction.

Thanks in advance for any help you can offer!

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Dennis M.
Rental Property Investor · Erie, PA · Member since 2018 · 6k+ posts · 9k+ votes
8y
I think this is stupid personally . I can’t fault a person that does it and I can understand why people do it but I find it unethical and dishonest . I don’t want the tenant lying to me so how could I in good conscience do it them . I’d be a hypocrite at that point and I have a higher authority to answer to . .. and Really Your not fooling anybody because it only takes a simple online search or call to the tax assets office to find out who actually owns the building even if it’s in a llc . I want the opposite I don’t want to hide .. I fully want the tenant to know I’m the landlord I have the power position and hold the authority . They need to know I’m not taking any crap from them or I’ll throw them out because I own the building
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  • Mark Fries
    Contractor · Jacksonville, FL · Member since 2017 · 1k+ posts · 2k+ votes
    8y
    you did right by creating the "vague entity"...separation is always good....bad guy versus the good guy...but you should make an LLC just for accounting purposes...its cheap to create and the right way to run the business...
    0Reply
  • Dennis M.
    Rental Property Investor · Erie, PA · Member since 2018 · 6k+ posts · 9k+ votes
    8y
    I think this is stupid personally . I can’t fault a person that does it and I can understand why people do it but I find it unethical and dishonest . I don’t want the tenant lying to me so how could I in good conscience do it them . I’d be a hypocrite at that point and I have a higher authority to answer to . .. and Really Your not fooling anybody because it only takes a simple online search or call to the tax assets office to find out who actually owns the building even if it’s in a llc . I want the opposite I don’t want to hide .. I fully want the tenant to know I’m the landlord I have the power position and hold the authority . They need to know I’m not taking any crap from them or I’ll throw them out because I own the building
    10Reply
  • Mark Fries
    Contractor · Jacksonville, FL · Member since 2017 · 1k+ posts · 2k+ votes
    8y
    you can create the LLC tonite, online, and have a new bank account to match setup by tomorrow...accept the rent made out to this new LLC
    1Reply
  • Account Closed
    Specialist · Paradise Valley, AZ · Member since 2018 · 3k+ posts · 2k+ votes
    8y

    I am always very clear that I am the seller/landlord/buyer. If they have a problem dealing with me I want to know before we get into any long term agreement. I also have Joint Venture partners and if a JV has part of the deal, I'll tell the other party that it is all subject to approval from my JV. After the fact surprises don't go over well on either side.

    0Reply
  • Randy E.
    Rental Property Investor · Durham, NC · Member since 2014 · 1k+ posts · 1k+ votes
    8y

    @Thom S.

    LOL, that reminds me of the character Easy Rawlins in Walter Mosley's books.  He bought several rental properties in the LA area and quickly found out he wasn't cut out to be a landlord (he was too soft-hearted, believed every late-rent-sob-story, and wouldn't evict) but he wanted to maintain a close eye on his properties.  He ended up hiring a no-nonsense Property Manager, but regularly visited the properties himself and presented himself to the tenants as the sometimes maintenance man.

    I think you should either cut yourself out of the picture entirely by hiring a PM, or continue to manage yourself and be upfront with the tenant.  If you're going to manage long term, you're going to have to reach the point where you can be firm with your tenants, whether you're the Landlord or the Property Manager.  It might as well be now.

    3Reply
  • Jim Walters
    Rental Property Investor · Conover, OH · Member since 2016 · 55 posts · 48 votes
    8y
    This is a tricky situation. From my experiences, it doesn’t make a big difference if you call yourself the Landlord, Property Manager or owner. I find a lot of people take Landlord more as the property manager than the owner, so I tend to go with that. Where I have heard people have some reservations about saying they are the owner is when they bought a multi-family property that they live in one of the units. I am told by some, that every time they say hi, renters are taking the opportunity to tell them what repairs need done. The way that works for me is walking through the house with potential renters and letting them know the condition of the house and what I believe they should call me about. During the walk they may ask if I would repair, paint, fix this or that. It helps set the tone of what to expect from me. It has lead to me receiving very few phone calls for petty things.
    5Reply
  • Thom S.
    OP
    Palm Springs, CA · Member since 2014 · 10 posts · 6 votes
    8y

    Wow--great feedback, everyone, thank you! This is certainly a learning experience. One thing I deeply appreciate about Bigger Pockets is that people come from a variety of viewpoints. The point about ethics and integrity certainly resonates with me, which is partly what has been bothering me. And underneath it, I imagine I am worried about being firm with my tenants, which would be a good thing to deal with now before it becomes a problem.

    This is all great food for thought--thanks so much to all of you for your input!

    1Reply
  • Rochelle G.
    Rental Property Investor · Lake Orion, MI · Member since 2018 · 22 posts · 27 votes
    8y
    As worried as you are from the get go, I don’t think it would be a bad idea to hire a property management company. Even if it’s only for the duration of the lease, it will give you some time to get used to stepping into the landlord shoes. Most management companies I’ve found will allow you out of your contract when your tenant leaves.
    1Reply
  • Ian WalshBusiness Member
    Lender · Philadelphia, PA · Member since 2016 · 2k+ posts · 1k+ votes
    8y

    For the most part, I have worked with people that like to say they are the property manager to keep it simple .  They have not had an issues with it.

    1Reply
  • Joe SplitrockPro Member
    Moderator
    Rental Property Investor · Sioux Falls, SD · Member since 2015 · 9k+ posts · 18k+ votes
    8y

    @Thom S. first of all, if you expect honesty from your tenants, why would you lie to them? Honesty is the best policy, but there is also no reason to divulge more than someone asked for. Keep it simple, call yourself the property manager. If they ask if you own the property, say yes. 

    You don't need an LLC to have a business name. It is called a DBA (doing business as). Pick any name you want (provided it is not trademarked) and the tenant will write checks out to that company name. Your bank will allow you to open an account under the DBA, so the account is listed under your name, DBA the company name. I have been doing this for 15 years and no issues.

    Don't create an LLC for the sake of having a business name. It is not necessary and in this case will just cost you time and money for no value.

    6Reply
  • Raul R.
    Rental Property Investor · New York City, NY · Member since 2017 · 493 posts · 386 votes
    8y
    Joe Splitrock I didn’t know about DBA, just stumbled into this post.. I learned something new just want to say Thank You!!! This is an option I didn’t know I had.. I will definitely research more about it
    1Reply
  • Terrell Garren
    Rental Property Investor · Concord, NC · Member since 2016 · 1k+ posts · 3k+ votes
    8y

    I agree with @Dennis M. and others - If you have difficulty telling people you own the property, you need to have a PM handle the business. I'm clear with my residents that I own the property, what to expect of me and what I expect of them. They have my mobile # to call / text for issues. Generally, I think they take better care of my property because they know I own it and am engaged about managing the relationship. I cannot imagine pretending I'm not the owner. Regarding an LLC - My take is an umbrella policy will cover your risk for 3 to 5 SFHs. If you get bigger than that, you need to consider an LLC for asset protection.

    1Reply
  • JD MartinBusiness Member
    Moderator
    Rock Star Extraordinaire · Northeast, TN · Member since 2015 · 10k+ posts · 16k+ votes
    8y

    I remember hearing that and thinking it sounds like a good idea, but to be honest any tenant I think is going to be enough of a PITA that I have to pretend I'm just the hired help, I don't place them in my units anyway. I prefer the tenant to know I'm the owner and am offering a nice place that I'm going to maintain and that I'm not going to take any BS. If I have to feel funny about the tenant having my cell, for example, then I don't want them as tenants. 

    This might change depending on your market, but I have a strong market and can find new renters in 5 seconds. My last opening rented in one day. So I don't have to pretend to have this veil of secrecy around me because I don't want to deal with difficult questions or worry about the tenants guilting me into letting them have leniency on payment dates, etc. I try to make it pretty clear how things are going to work when they rent my properties, and if this is going to be a problem for them they need to move along. 

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    3Reply
  • Jill F.
    Investor · Akron, OH · Member since 2016 · 2k+ posts · 4k+ votes
    8y

    I have found that most tenants  prefer to have a self-managing landlord. After all, " the buck stops here." Most seem to appreciate that we care about our properties and actually work on them ourselves-- but still have good judgement about when to call in a pro.

    However, you really do have to be able say "No" and "Yes, I'll work the numbers and let you know how much it will cost." 

    I have found most tenants to be reasonable people.

    2Reply
  • Mike Nelson
    Investor · Oak Park, IL · Member since 2014 · 307 posts · 150 votes
    8y

    The term "landlord"  or "land lord"  has always seemed like an old term left over from the 1800's when my ancestors were both peasants and poor tenant farmers paying monthly rent to the more wealthy owners.  In some countries, the owner was actually a lord.

    0Reply
  • Bjorn AhlbladPro Member
    Investor · Shelton, WA · Member since 2017 · 6k+ posts · 6k+ votes
    8y

    Most of my tenants know me as the PM-the guy that gets things done; anything to do with tenants or the property, I take care of that. Some of them know that I am the landlord too; but that is of no consequence really. If asked a direct question I will give a direct answer. Tenants only need to know the PM, and that is what I introduce myself as.  

    0Reply
  • Alyssa Paros
    Rental Property Investor · Johnstown, PA · Member since 2017 · 71 posts · 42 votes
    8y

    I think you need to ask yourself why you're uncomfortable telling your tenants that you're the owner. Is it because you don't feel you can be stern when push comes to shove? For us, I wanted to protect my family and create separation between our home and our business. By setting up a PO box ($100 for the year), we are able to have mail sent to the PO box and tenants do not need to know where we are personally. They do know that we are the owners as we want to ensure that they are being honest with us and don't feel we can do that if we aren't honest with them.

    0Reply
  • Nancy DeSocio
    Rental Property Investor · Cranston, RI · Member since 2017 · 171 posts · 158 votes
    8y

    @Thom S., I did the same as you when introducing myself (and maybe for the same reasons), but once I told the tenants that I own the property, they referred to me as the landlord.   To me it's just semantics...I'm not too worried about what they call me as long as I focus on keeping my business running smoothly,  In my opinion, you have a good newbie "problem" on your hands...I anticipate the problems get worse as time goes on :)  Good luck on your journey!

    0Reply
  • Matt K.
    Walnut Creek, CA · Member since 2015 · 3k+ posts · 2k+ votes
    8y
    Originally posted by @Mark Fries:
    you did right by creating the "vague entity"...separation is always good....bad guy versus the good guy...but you should make an LLC just for accounting purposes...its cheap to create and the right way to run the business...

    LLC isn't cheap in CA... it's 800 min tax bill........ even if the prop is out of state. It also makes it much harder to get lending as it means you're most likely going to have to go commercial which in turn means higher rates...

    To the OP... just tell them to cut you the check, but you can always defer the to your "boss" when you run into issues. If they want new floors, "I'll have to ask my boss, or I asked my boss and he said no at this time".

    0Reply
  • Thomas S.
    Member since 2016 · 13k+ posts · 12k+ votes
    8y

    Those that can do....... those that can't should hire a PM.

    If one does not have the fortitude to be honest with their tenants and present themselves as the owner they should not be interacting with tenants. Presenting yourself as anything other than the owner is dishonest. If you want to hide do it behind a PM not a lie.

    1Reply
  • Dennis M.
    Rental Property Investor · Erie, PA · Member since 2018 · 6k+ posts · 9k+ votes
    8y
    Originally posted by @Thomas S.:

    Those that can do....... those that can't should hire a PM.

    If one does not have the fortitude to be honest with their tenants and present themselves as the owner they should not be interacting with tenants. Presenting yourself as anything other than the owner is dishonest. If you want to hide do it behind a PM not a lie.

    Agreed .. besides I want the tenants to know I am the authority to answer to... that  I hold the cards ! I wAnt them to realize when I say clean up all this trash or get that drug dealer boyfriend out that it’s serious and I’m not just the guy that mows or changes light bulbs that they can shrug off as some kind of maintenance guy 

    1Reply
  • Thom S.
    OP
    Palm Springs, CA · Member since 2014 · 10 posts · 6 votes
    8y

    @Joe Splitrock, that's great advice, thank you. The DBA option is a graceful way to extricate myself from the situation I created, and moving forward I will definitely go with the consensus here and give a direct, honest answer to a direct question. No evasions necessary.

    And thanks for the encouragement, @Nancy DeSocio! I'm sure I'll have more learning opportunities as I venture further down this path. My lesson for today is to dig a little deeper into advice I pull from RE books. I can see where the advice came from, but I hadn't really considered all the ramifications. 

    1Reply
  • Steve Babiak
    Real Estate Investor · Audubon, PA · Member since 2009 · 13k+ posts · 8k+ votes
    8y
    Originally posted by @Mike Nelson:

    The term "landlord"  or "land lord"  has always seemed like an old term left over from the 1800's when my ancestors were both peasants and poor tenant farmers paying monthly rent to the more wealthy owners.  In some countries, the owner was actually a lord.

    So you'd rather use the term "lessor" and see if the tenants (sorry "lessees") can figure out what that means?

    0Reply
  • Steve Bracero
    Real Estate Agent · Westboro, MA · Member since 2016 · 1k+ posts · 471 votes
    8y

    @Thom S.

    When i inherited tenants, they thought i was the property manager.. since i was younger- then I told them I bought the building and I think the best thing is to read the situation accordingly. You can also use specific language in your lease/ taw agreement to refer to yourself as "landlord" or "Lessor" as well 

    0Reply
  • Adam Pond
    Member since 2018 · 28 posts · 9 votes
    8y

    I just started on my RE journey as well, so I am in no way an expert. With that disclaimer, if they're already under the impression that you're the landlord, maintain that degree of separation by suggesting that you are not the sole/main decision maker. Surely you have friends or family or mentors that you rely on to help you. They will make the rent check to you because you're the acting owner, but any problems arising (especially when it comes time to raise rates) will not directly anchor to an image of you high-rolling in Vegas whilst sinisterly rubbing your hands together. 

    0Reply
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