If I could go back and talk to my younger self when I first started buying rental properties, this is one of the conversations we'd have.

One of the things that I think confuses people, especially because I'm the broker for a property management company, is they assume we manage tenants. They'll say, "Well, you guys are property managers. You manage tenants."

No. We don't manage tenants. We manage contracts.

That's exactly it. We have an agreement with the resident. They agreed to do certain things. We agreed to do certain things. And my job is to manage that agreement.

Years ago, I used to tell tenants, and this may sound like blasphemy if you're religious, but I'd tell them, "You see this lease agreement? This is the Bible between me and you. Everything I'm going to do is going to come from here. Sometimes I may forget something. Sometimes I may miss something. But rest assured, I'm going to come right back to this document. And if you're ever wondering what I'm going to do next, go back to the lease agreement. Because everything I do comes from here."

The average investor has to come up with tens of thousands, if not hundreds of thousands of dollars, to get control of a property. Then they turn around and give possession of that property to someone else for first month's rent, a security deposit, and maybe last month's rent. Let that stew for a second.

You may have paid twenty times more than a tenant for that house and they get to live in it. so, as the owner, you're already at a disadvantage. You have more money invested. You have more responsibility. You have more risk. You have more to lose. It may have taken years to build the credit, save the money, to get that property. The tenant gets access to it for a fraction of that.

Meanwhile, you're still responsible for the mortgage. You're responsible for the taxes/insurance/maintenance/rental registration/lead certification. You're responsible for everything.

So why would you manage the investment based on emotions instead of the agreement?

This is not the time to become a therapist. This is not the time to start managing excuses. This is not the time to start managing why things happened. Why they lost their job. Why they got behind. Why life got difficult. Why they can't comply.

And that's not being cruel. That's staying focused and standing on business. Because none of those things are the agreement. The rental lease agreement is the bible. Manage the contract.

Listen to this. We had a resident who stayed with us. Now, every time a resident calls, we record the conversation. We take notes and we write in our database what the reason for the phone call was.

One year he called and said the rent was going to be late. His father had passed away. He was from Alabama and he had to go out of state to bury his father. He just wanted to give us a heads up. We told him we're sorry about his loss. I told him “you'll get a three-day notice. You won't be here when it's served, but you'll see it on the door when you get back." And when he returned he paid the rent.

About a year and a half later, he called again to share with me that his dad had passed away, that he needed to go down to Alabama, that the rent was going to be late.

At no time did I express to him, "Hey, you know, you've called us and told us this story before." I said nothing. I just listened and I was like, "Yeah, we're sorry about your loss and we wish you the best." And then we put a note in our system and sent out the notice.

And sure enough, a while later, he called a third time with the same story. Same thing. I listened, we put a note in the system, and the notice went out.

He was with us for about seven years. He killed his dad three times during the seven years he stayed with us. It's just crazy and funny to me.

But here's the point. I never had to argue with him. I never had to call him a liar. I never had to figure out which story was true. I didn't need to. The lease said when rent was due, the notice went out like it always does, and the rent got paid. The contract did the work.

Here's another way to think about it. If you have a mortgage on the property, do you think the mortgage company is managing your feelings? Do you think they're managing your circumstances? Your excuses? Do you think they care that you didn't feel well? That you lost your job? That your tenant didn't pay? That you placed the wrong tenant? That you had to file an eviction?

Of course not. They're managing the agreement. Nothing more. Nothing less.

And if that's good enough for multi-million-dollar and billion-dollar organizations, I've always found it interesting that landlords think there's some alternative approach available to them. There isn't. There is only the agreement. Dig deep, grasshopper.

Now don't misunderstand me. I'm not saying don't be respectful. I'm not saying don't be professional. I'm not saying don't be understanding. What I am saying is don't confuse understanding someone with abandoning the agreement that both parties signed. Those are two different things.

One of the reasons a lot of landlords struggle is because they stop managing the contract and start managing emotions. And emotions are difficult to collect. Emotions don't pay rent. Emotions don't maintain properties. Emotions don't satisfy mortgage obligations.

The contract does.

The contract tells you what happens next. The contract removes uncertainty. The contract creates consistency. And consistency creates predictability. At the end of the day, that's what most investors are really looking for. Predictability (mailbox money on time).

The more you focus on managing the agreement instead of managing personalities, the more predictable your rental business becomes. The more predictable your rental business becomes, the fewer surprises you'll experience. And the fewer surprises you'll experience, the more likely you are to enjoy real estate investing.

If I could give my younger self one piece of advice, it would be this: Have a good contract. Know your contract. Follow your contract. Manage the contract.

Because the moment you stop managing the rental lease agreement and start managing excuses, you've already started moving away from the thing that protects both you and the property.

People think we manage tenants. We don't. We manage agreements.

What helps you stay consistent with the lease while still treating residents respectfully?