Hey guys so last night I watched It's a wonderful life. Now being involved in real estate and thinking like an investor I saw the movie in a whole different way. George was a very lenient person and cared about the people and was very compassionate and understanding doing his best to help people live in the home of their dreams. However he gave a lot of people breaks and wasn't too stern with them on payments. On the other hand there was Mr. Potter who only cared about the numbers, not the people, and would always ask George "Are you running a business or a charity George?" I think this is where we begin to see what a "slumlord" is and why people always saw Real estate investors or landlords in a negative way. This is a mentality that people have had since the 1940's! My question is for those of you who have seen the movie, and if you haven't shame on you, who should I be like as a landlord? Should I care about the tenants and be understanding or should I only focus on the numbers and say pay up or get out? Is there a grey area or is it clearly defined? Thanks for reading and Merry Christmas!

I bought my buildings from "George." He was very lenient on when he expected the rent, very understanding of irresponsible behavior and in turn he expected the same from the tenants. He owned the buildings for just short of 20 years and they spiraled down hill as the quid pro quo of irresponsibility fed off of each other. When it came around to cleaning house and clearing out the ne'erdowells you couldn't imagine how they bad mouth him. So all his understanding got him nowhere. I give my new tenants a pristine apartment in an extremely desirable neighborhood. I am very responsible as a landlord and I fully expect my tenants to be. People don't realize that it is the Georges who are the slumlords. The landlords who are responsible and dedicated know that they must demand the same from their tenants for their buildings to be a desirable place to live for responsible people and for their investment to grow in value. The slumlords don't care. The people in my buildings don't want to live next to irresponsible people. I love being a landlord- it is a wonderful life.

First off, Love that movie. I actually named my dogs after that movie because it is and always will be my favorite holiday movie. George Bailey (4 yr old goldendoodle) and Harry Bailey (1.5 yr old labradoodle). But when trying to determine which landlord you should be like, keep in mind two things.1) George was living in what was essentially an abandoned home that he had been trying to fix up himself over the years and it was still riddled with problems. 2) There is a huge difference in letting people slide on money when tragedy hits and just letting them slide. The thing was George bailey was that he was always there to help people. But only those that he trusted and that he knew would eventually pay him back. And at the end, where george was in a jam, you see all those people he helped over the years pay it back to him and then some. But the reality is, not a single renter that I've ever given a break on the rent or the late fee has ever done a thing for me and never will. And none of them will ever even show up to my funeral. Nor will any of the people that show up at my funeral ever have a clue of how many of those renters have gotten a break from me. So my answer would be this. If you want to be like George Bailey in your landlording then fix your houses up nice and get your repairs done for your tenants as soon as humanly possible. Thats what will make you more into George Bailey. But don't equate being kind and generous to letting people get away with not paying or with constantly paying late. I'm not saying I don't do it because I do. But thats a flaw in me in terms of running a good business. Thats not something to be admired as a positive character trait of being generous. Ultimately, if you aren't collecting all the rent owed to you, you won't be able to do the repairs and rehab your homes to the level that will make your tenants proud to live in your homes. And, to me, that is the kind of landlord that I'd consider being closer to a Mr. Potter than a Harry Bailey. And here are my personal George Bailey (right) and Harry Bailey (left). :-)

@Michael Guzik that is my favorite Christmas movie. They never say in the movie that George isn't getting payments on time. In fact when a friend needs money, he states it is a personal loan. The building and loan is clearly a low profit business. He expanded his business by giving fair loans and not gouging people like Potters Field. As a result, the building and loan had very loyal customers. Potter was losing customers to the building and loan at such an alarming rate that he would do anything to take George down. There is a valuable business less here, which is treating your customers right and giving them massive value. As a result you drive customer loyalty. Everyone hated Potter, but when George was in trouble, everyone was willing to loan him money. Real estate is a relationship business. Too many landlords come on BP with a Potter mentality. That reputation catches up with you. It is not about being soft on tenants, but rather giving them good value and treating people like you would want to be treated. The most important lesson from the movie is perspective on what is important. If you don't have family and friends to share your life, then you will become a bitter old man some day.

@Joe Splitrock It's my favorite as well! You are 100% right and I couldn't agree more. He was providing real value and being an honest and caring person to everyone which is what everyone wants. His reputation was known across the whole town and that is something that money can't buy! I don't know if you listen to the MFCEO podcast, but you hit on some of the very key points that Andy always talks about. REI is a relationship business and relationships are built on honesty and providing value. Thanks for the perspective and in depth comment!

Poor simple minded George would be eaten alive by tenants today. The world has changed and so have people and business. I operate a business and make decisions based on money however this does not mean that I treat my good tenants badly or own a slum. A good tenant is one that pays full rent on time and in return I treat them with respect and insure the property is well maintained. No pay no stay is a necessity to survive. There is however a grey area based on a tenants payment history. If they are a good tenant they will pay, if they are a new tenant or have a history of late payments in their past then no pay no stay is a smart business practice. If a tenant clearly can not pay and will not be able to pay within the month a smart landlord will take immediate action to begin the process. Keeping n mind it can be canceled at any time. A blanket approach is not prudent business practice, compassion is a landlords greatest nemesis. No good deed ever goes unpunished.

Michael, I try to be somewhere in the middle, but in the end I am running a business, and we need to make money to pay the mortgage and take care of the property. I give people one break on late rent; I always ask "do you want this to be your one time break" or do you want to save it for later"? It helps because I am being lenient, but they also have to take responsibility. If they do have a medical emergency or divorce and need to end the lease, I let them go and move on.....

I've seen It's a Wonderful Life over 20 something years ago while in grade school but was too busy reading a book to pay attention. However, as a landlord I tend to be more like George but striving to be more like Mr. Potter as I get more serious about REI. It's like anything else in life-- most people are nice and normal and don't want to take advantage of you so being George is fine. However, there are a few bad apples who really try to take advantage of everything so that's when you play Mr. Potter. If I could do everything over again, I would start out as Mr. Potter and then after knowing how people are, be George on a case by case basis. On the flip side, I've had renters who pay late (they always pay in full) but are the most grateful tenants and I enjoy my dealings with them and I've had renters who pay on time that are just horrible and entitled and I dread seeing anything from them.

Is it really a wonderful life as a landlord?

Ned J.Pro Member

Investor · Manteca, CA · Member since 2017 · 1k+ posts · 2k+ votes

8y

Its a feel good movie....but FAR from reality...... a large portion of people are more than willing to take advantage of you and then kick you in the gut when you need them to reciprocate your generosity. Not all of them....but a LOT of them.

In my profession we have a saying...no good deed goes unpunished....... I cant count the number of clients I have bent over backward to help purely out of generosity....goodness of my heart....and the number that have turned around to ***** and complain about some tiny detail and made my life miserable..... left to go to my competitor in town..... had to send to collections. Been burned many a time....

None of them will come to my funeral..... NONE of them will come bail me out of jail....... NONE of them will help my bury a body in the desert...they aren't my family and they aren't my friends....they are my customers.

So there is a middle ground....be courteous, professional, friendly but not friends....but run a business.

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Mindy JensenPro Member

BiggerPockets Money Podcast Host · Longmont, CO · Member since 2014 · 7k+ posts · 10k+ votes

8y

Originally posted by @Patrick M.:

"... quid pro quo of irresponsibility ..."

This is my favorite line ever typed into BiggerPockets.

[email protected]Podcast Guest on Show #261

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Sandra M. Dempsey

East Wenatchee, WA · Member since 2017 · 16 posts · 3 votes

8y

I really loved this observation and reading the responses. I'm new to landlording and real estate investing. My take on this is that to be able to provide housing for people I need to pay the bills and that means the tenants need to pay their tent. I don't want to end up like George Bailey and be nearly bankrupt. Thank you for this thought-provoking post. .

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Ian WalshBusiness Member

Lender · Philadelphia, PA · Member since 2016 · 2k+ posts · 1k+ votes

8y

Being a landlord is what you make of it. Every landlord has different methods, tendencies, practices, goals, types of properties etc. You can make it a great experience or awful one. Ultimately, it is the landlord that decides.

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Michael Guzik

OP

Real Estate Agent · San Antonio, TX · Member since 2017 · 523 posts · 362 votes

8y

@Jay Leisten That's awesome! Thank you for the comment and I'm amazed at your mission that sounds incredible keep it up!

@Ned J. I agree with you, there are way too many selfish and ungrateful people out there. The difference is in It's a wonderful life the people in the town weren't like that. I don't think it's far from reality, I just think they lived in a very different time and era with a completely different culture. You just had to throw in that they won't help me bury a body in the desert LOL. Thanks for the post!

@Sandra M. Dempsey I'm glad I could help thanks for reading and for the comment!

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Mike Nelson

Investor · Oak Park, IL · Member since 2014 · 316 posts · 150 votes

8y

Growing up I always believed Potter was a total bad guy. The other day I was watching this classic with my wife, and remarked, "Sure, Potter is kind of an ***, but is in a real tough position in light of the economy, and has to have a thick skin."

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Lala Weiss

Investor · Salt Lake City · Member since 2017 · 52 posts · 23 votes

8y

I think it depends on how many doors you have have what the tenants are like. My current tenants really push the envelope until I put my Mr. Potter hat on. At the end of the day there is no right way to landlord. But it also depends on whether your management style effects your bottom dollar in a positive, neutral or negative way.

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Sam Josh

Sunnyvale , CA · Member since 2017 · 373 posts · 362 votes

8y

I tend to be fair and balanced. I cannot stand my tenants being inconvenienced, so I often go out of the way to ensure they are comfortable, but I cannot stand them not paying rent on time or damaging my properties.

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Brenda Wright

Flipper · Brooklyn, NY · Member since 2017 · 55 posts · 43 votes

8y

3 Key points to maximum happiness:

a) Have the best management company.

b) Have a property that handles eviction is fast (not like NY or LA, can be 6 years vs 6 days).

c) Search for properties that are not affected by the market (example: Military Cities), where people will always have a salary.

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Kurt Pauley

Realtor · Minneapolis, MN · Member since 2016 · 245 posts · 107 votes

8y

Hi there, I think you need to define it for yourself so there is not a grey area. I love to help people and that is my nature but that is also what has burned me in the past because I am too trusting. In terms of rent or late payments I am very strict. I abide by everything in the signed lease. I usually make the lease out to be the bad guy. Everything else, I love to help out. Get repairs done promptly, Christmas gift cards, stop in to say "Hi" from time to time and ask if they need anything. My tenants know I am very willing to help with anything and we have a great relationship. They also know that if they are late then they will have to pay a late fee. Picking good tenants is crucial. If you make sure to really wait for the best tenant possible and they can truly afford your place no problem then you shouldn't have problems.

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Michael Guzik

OP

Real Estate Agent · San Antonio, TX · Member since 2017 · 523 posts · 362 votes

8y

@Mindy Jensen Could you elaborate I don't quite understand what you are getting at?

@Mike Nelson I can see her point but I think she is being way too nice he took advantage of others, and only cared about money...

@Lala Weiss I completely agree it's all situational and in the end you have to do what you feel is best for yourself and your property!

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Mindy JensenPro Member

BiggerPockets Money Podcast Host · Longmont, CO · Member since 2014 · 7k+ posts · 10k+ votes

8y

@Michael Guzik , I just really liked that phrase. The quid pro quo of irresponsibility.

[email protected]Podcast Guest on Show #261

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Michael Guzik

OP

Real Estate Agent · San Antonio, TX · Member since 2017 · 523 posts · 362 votes

8y

@Mindy Jensen I still don't understand what the heck you are saying but okay lol!

@Kurt Pauley I agree tenant screen is so crucial and will make or break you!

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Linda S.

Investor · Richmond, VA · Member since 2016 · 1k+ posts · 2k+ votes

8y

@Michael Guzik,

How good a landlord is, IMO is based on how quickly they fix problems, and provide a great place to live! If something breaks, I'd bet Mr. Potter gets it done quickly because he gets payments.. whereas George might take a long time because he doesn't have the money.. Being relaxed with money? just shows your tenants you are a pushover and won't enforce policies. We accept late, but always do the late fee because of it.

I don't do Christmas cards, as we like to keep it 100% professional.... each year they stay, we ask them how we can improve their homes ( up to $150) and give them an option to keep rent at the same rate (pay by the first). I agree with others, you gotta figure out upfront which way you will be, tenants are smart and will learn immediately what they can/can't get away with.

#TeamPotter

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Ola Dantis

Multifamily Syndicator · Houston, TX · Member since 2016 · 1k+ posts · 2k+ votes

8y

@Michael Guzik Hey Michael, I guess a big shame on me, as I haven't watched this show :)

Now, as Landlords, we have to REMAIN HUMAN, meaning that we have to be fair but firm. I'm not sure if you've heard of the term professional tenants, yes, this is a thing.

Unfortunately, there are a few people out there who do not have your interests at heart and are willing to do whatever it takes to cheat you and the system.

To keep this short, I will say you have to strike a good balance, but more importantly, plan ahead for your responses to your tenants. That way, you are not caught off guard. Read @Brandon Turner book on Managing Rental Properties :)

Kindness always wins and being human. You might be lucky and never meet those who are trying to take advantage.

Good luck. Thanks! - Ola

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Michael Guzik

OP

Real Estate Agent · San Antonio, TX · Member since 2017 · 523 posts · 362 votes

8y

@Linda S. I understand where you are coming from, but in the movie Potter didn't fix things and had horrible properties that they referred to as shacks! That's why many went to George and built there own home! That's a good point though you set the terms and base of the relationship right away that way there are no questions or problems with being inconsistent.

1 Reply

Linda S.

Investor · Richmond, VA · Member since 2016 · 1k+ posts · 2k+ votes

8y

haha sorry @Michael Guzik, its been a while since i've seen it!

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Is it really a wonderful life as a landlord?

Is it really a wonderful life as a landlord?

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