So I am on track to close on my first property on November 30th. It will be a house hack 3BR 1.5 Bath, where I plan to live in one room while renting out the other 2. Being in Boston, I think I will be able to get it rented quite quickly. However, I'm unsure how I should approach prospective tenants.
I've read before that saying you are the property manager ( owned by a family, friend, etc) instead of owner is the way to go about it. But, I also don't want to have tenants feel like I deceived them. Inevitably I could see one of my friends letting it slip some night. How does everyone else handle it??
It will be odd to pretend you are the property manager when you are the owner! Where did you read this garbage that you should lie about who you are?! Tenants in my humble opinion respect owners a lot more than property managers. Establishing a rapport with your tenants is the way to go. Don't sweat this, it's quite simple.
Nick, there can be a lot of testing by tenants when you are a LL. As a new LL , it might be easier to pretend to be the manager if you have "nice guy syndrome" and if you want to avoid getting burned by tenants. All this ruse does is buy you a little time ("I have to check with my uncle" or "I have to check with my partner") when someone asks you if they can be late on their rent or paint their room purple.
If you already have life experience saying "No", can stick to your guns, and can channel your inner Thomas S. , you do not need this ruse.
Within your first year you will either be burned by tenants, and decide LLing is not for you, or toughen up and no longer need the ruse. It is all about your self- confidence. Increase your self confidence by knowing your local laws, and knowing what to do in a worse case scenario. Know the eviction process. Have some snappy comebacks ready for common tenant requests. Have a screening process in place and follow it. Have enough money in the bank so you do not make financial panic driven bad decisions.
In either case, have a strong written rental agreement, and written house rules that your tenant signs before moving in. Remember, it is easier to start out tough, and then loosen up for good tenants IF YOU CHOOSE, then start out loose and have to toughen up after you have trained your tenants to be lax. I would use month to month rental agreements because I don't want to have to live with someone I cannot stand.
You will have some wins and losses whatever you do, but with proper planning you will come out with MORE wins than losses.
I would be honest! Screen your tenants real well and you should have none of those problems.
I think you would be hurt more if your cover was blown while living in the house vs if it was blown outside of it.
While I agree that it makes you jave a stronger stance to assume when dealing with tennants, if they find out and live with you every day it could cause problems.
In this instance I suggest being upfront but firm. Remember, this is a business relationship you are building with the tennant, not a friendship.
@Senthil N. The practice of pretending to be the property manager is a very good strategy when your not living in the property. It gives a degree of separation between the job you need to accomplish and the relationship with the tenants.
That being said when your living in the property and it’s only a duplex I can’t imagine you want to lie like that to your neighbor. But it definitely will require being straight and strong about any issues and rental payments.
OMG,, Really,, I'd suggest first you download your states landlord tenant laws.
You want your tenants that are LIVING in SAME HOUSE as you not to know who you are.. are you serious
Take Pride in ownership, Run a business, not a scam, why would a tenant be truthful to you in the future if you can't be with them.. Ashamed of being a owner.
Trump has his name on Trump Towers..
Rental is a Business not a hobby.
sounds harsh maybe, but my point is so is being a landlord, you make decisions they start , stop with you, your responsible, and your the one that's going to have to represent your self if you go to court. get sued,
You don't have to be their friends,, that's not every a great idea,, but your the owner , manager, one whom set the standards of what they are expected to follow according to your lease agreement. Any you have to follow state regulations.
If you can't don't start.
I'm house hacking and my tenants (who I've drawn from among my friends) all know I own the house. I think that's the best way to go if you're living as a roommate with your tenants as there's less subterfuge required in your daily life. Presenting yourself as the property manager is fine if you're talking about a standalone property.
I use the same lease I do for my rentals (with some slight modifications - mostly regarding shared space access and utilities) but the key difference is term. For roommates I always go with month-to-month. That way, if there's an issue or the personality fit isn't right either side can terminate with 30 days written notice. I make that explicitly clear in my conversations with any tenant/roommates and underline that I want the home to be a good community for everyone there. I haven't had any issues. Drawing from your friend base helps with this, as friends generally have similar interests and are at similar life-stages. Having that alignment can really help cut down on friction.
I would also look at the economics of airbnb (or similar) in your area. If you don't have roommates you want to move in right away short-term rentals seem to be higher cash flow, and if you're willing to put in the work might be more profitable and less stressful than having a full-time roommate. Just a thought.
Hi Nick! I definitely understand you wanting to keep a bit of a veil over the fact that you are indeed the owner of the property. However due to you the unique living situation I believe that might not be the best route. I am currently not aware of any law that states you must disclose this information. (they could really just find it out on their own LLC or not)
I definitely HIGHLY recommend that you take some fair housing courses and really familiarize yourself with tenant/landlord laws in your area. Owning rentals is tough enough but then throw in the fact that you will also be living with your tenants is a whole other animal!!!
My opinion honesty is the best policy!! Plenty of homeowners rent out rooms! Good Luck!!!! Landlording is tough but good work when done right!!!
Cowards and hobby investor/landlords lie about who they are.
Take a little pride in being the owner and operate a professional business.
The very first time I meet my potential tenants I say "Hi, I'm Jim, I'm the owner". That way they know what I say goes. I don't have to ask someone else. I don't know if one way "works" better or not but this is the way I do it.
The most important thing is to be honest, so you can quickly earn your tenants trust. A respectful mutual relationship is key! If you can establish this, you'll thank yourself in the long run.
Let them know you are the owner, conduct a very comprehensive screening, and use your best judgement. You should be just fine!
Being up front about your ownership may lead to situations where tenants say "Just this one time..." or "I am really pleading to your good graces." Running a fair and honest business means not shying away from these situations and making sure that you respond to all problems lawfully and CONSISTENTLY.
I work as someone else's Property Manager, and while I am always tempted to hide behind the phrase, "I am not the owner so I cannot say..." or "You would have to take that up with the owner..." I have learned that the honest and fair way to deal with a problem is by taking responsibility and saying "I am sorry, but our policy is BLANK, because BLANK. I understand you are in a tough situation, but this was our agreement from the moment we discussed and signed the lease together."
I deal with tough situations everyday, but being sure that I am responding to every tenant in a honest and consistent way according to the law and business policy is the way I know I am treating everyone with respect and equality.
Rental properties around me are very expensive. I had to dream for a long time while I search for my building, the thought of surrendering my authority and responsibility is ridiculous. Following @Bettina F. 's line of thought- your default answer is no. Really quite simple. No. Can I? No.
Additionally, I take extraordinary pride in my buildings which I am repositioning. I want people to know who is responsible.
I am a fan of The Office. And if you are a longtime viewer you can break yourself down as a landlord into 3 categories.
Michael Scott: Wants to be friends with everyone, wants to be liked by everyone. Horrible manager who refuses to take responsibility for anything unless it turned out to be a good idea/work. Can't make a decision and when he does it is only to be liked more. (This is your "I'm just the property manager landlord")
Toby Flenderson: A completely ineffective person who cannot assert himself and if he eventually does he does it in a fit and it alienates him from others. No one pays attention to him and any attempts by him to assert his views is done through back channels so again, no one pays attention to him
Dwight Schrute: The best salesman year after year. He is forthright, does not mince words and bluntly tells people what they can do if they disagree with him. He is always prepared and even overly prepared. He relishes authority and seeks to make an inefficient work area more efficient whenever possible. With that being said- he leaves his work life in the office, goes home and enjoys running his beet farm and his battle star galactica. Many see Dwight as the idiot, but he is anything but. He makes so much money that he eventually buys the building that Dunder Miflin leases space in. He winds up with the girl and lives a happy and fulfilled life.
I strive to be Dwight Schrute.
I know- I know, you want to be Jim- But remember when Jim was made manager. He could not handle it and began falling into the ways of Michael Scott before he gave it up.
When faced with a trying issue as a landlord I simply do a modified Office/Guardians of the Galaxy and repeat my mantra: "I am Schrute"
That being said- the thought of living with my tenants is an extraordinarily weird one which I cannot fathom. Good Luck.
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