Landlords... Stop being so hard on your tenants

125 Replies

i think the issue is not all landlords are created equal. you have some very weathly landlord out here that keep saying all landlords should eat the loss, but many like my self cant eat the loss's. i probably make the same or maybe a little more the my tenants at my w-2. the only difference is they have nicer cars then me, and dirt bikes, and 4 wheelers, and snowmobiles, they go on more vacations then me, they go out to eat more then i. i spend that money on investing. so why should i be the one that suffers? if your day job brings you 150k+ and you have 50 rentals ok i could see how you might be "privileged" unfortunately thats not all of us. and from going to my local meets i can say most of those people also arnt Privileged ether. i will say if there is something you can do that wont affect you badly then yeah go for it. maybe get a forbearance or something along those lines. but you shouldnt have to be forced to eat into your reserve because the people who live paycheck to paycheck tend to be pretty fortunate with how they treat them self on a daily basis, hence why they live pay check to paycheck. 

you guys have to realize you should work with tenants,because if this last along time like 2008 ,you will realize what i mean.sure everyone should be able pay their rent with their stimulas checks.sure you might have to workout payment plans to they get them.but after that it might get rough ,if the goverment does not get people back to work.what choice to you have,a tenant you know,or a complete stranger without a job.alot of you where not around in 2000 and 2008.this market could get real bad.like now if you advertise a place you get a good responce to look at it.in 2008 you would advertise and hardly anybody would respond and if they did they wanted 1 or 2 months free rent.i would prefer to work with tenants now,and i can already  know which tenants its going to be.it will be the 10% of tenants you always have to remind to pay.90% of your tenants will find a way to pay.we  all know they signed a contract to pay,just be nice if they work with you,maybe stop late fees or reduce them.but to forgive the rent is another story,unless the goverment forgives our taxes.you got to realize now you should be in survival mold,for i can tell you if you make it threw their should be sunshine at the other end.because most new building is coming to a halt,most remodeling coming to halt ,most family being home more ,which maybe creates larger family,and when this done most banks will have even more tougher standards for a loan ,like 6 months reserve for a borrower.so down the road rents will rise probably more then before this crisis.so just hang in their and develop a plan you your situation.so look as this as a bump in the road.and if you live in wisconsin ,you should know by the amount of potholes we have

This is an unprecedented health and financial situation , so we are being flexible and trying to be a part of the solutions :

  • 1) If our tenants alert us to their inability to pay rents - we are being compassionate and listening.
  • 2) We are asking for little more background on their situation ( Lost job ? sick ? someone in the family sick ?)
  • 3) If we think there are genuine reasons , we are offering a combination ( not all) of the following options
  • .   3.a) Waive late fees
  • .   3.b) Adjust their security deposit for the next months rent
  • .   3.c) Offer flexible termination of the lease, if they want to vacate and move with family
  •     3.d) Offer them additional 30 days to pay current rent.
  •     3.e) Issue a notice to them that is empathetic to their situation , but also puts the eviction process rolling so it         can be executed once we we want and are legally able to.
  • 4) If we believe that they are taking unfair advantage of the situation and not paying rent ( They still have their job , no sickness etc) - we are providing them a notice to intent to evict as soon as we are legally able to.

Welcome thoughts on anything we can do different.

Thanks

i agree with robert not all landlords are alike.but one thing we all have in common we bought are buildings on tenants paying rent.if does not matter if one unit or 1000.we all counted on that tenant paying rent.so do wantever helps you do it in collecting rent.i have found now will most tenants i will talked to most have their april rents ,and will probably have may rent will stimulas check.so start building up a cash reserve,put all major  remodeling  on hold.just fix what you must.your job now is to babysit your tenants ,try to get them to realize them stimulas check has to last along with those unemployment checks.i know none of you have signed up for this,but you have to adapt,or you will be one of the landlords that will go out of business.i seen many in 2008 ,that will stubborn in their ways and it hurt them.i was one for a liitle while then too.but you will learn without threat of eviction certain tenants our going to think they do not have to pay.your best chance is tell them work with you now to evoid eviction later.some will work out,and some not.but that is just like when you pick a tenant,you really do not know to 3 months later,if you got lucky and picked a great tenant.

@Lynnette E. Some people have to quit due to their circumstances:

  If you have ailing parents who live with you, If you have health issues, children with health issues. Dealing with the public may not be for you.  My daughter works at a store where people are shopping for bathing suits in Pittsburgh!!! People who thinks now it's a great opportunity to shop! People will come within a foot from her to ask questions and she has to back up.  She is careful but still  I am scared for her!! All those service workers are risking their lives.  And some may decide to put their family first.

I agree with Jason, that it's better to be proactive and give some, than to stick to your guns and refuse to bend. 

The fact is, this is an unusual situation and we all have to work together to overcome it. It's not just 'being a do-gooder or bleeding heart'. It often can also make good sense business wise, even if the benefit is intangible. 

I have dropped all of my tenants' rent to above my mortgage and sent them a letter, letting them know that this would be April's rent. Several have already paid ahead of time, letting me know how much they appreciate it. 

As mentioned, a turnover and 1 month vacancy would cost me more than a dropped rent. And a tenant seeing that a landlord is a human being and not just a money-hungry landlord also gets some intangible benefits. I only expect 2 tenants to be taking advantage of me and the eviction moratorium and both of those I had filed eviction for before this all happened. They had court dates, that were cancelled for both :-(. So, it's not my 'niceness' that started this. 

I can live without profit for a month. I don't have an expensive life style and no car payment. My own mortgage is covered with all of the rent payments. I have some cash reserves. 

What do you all think of the restaurants that had to close but who are cooking now food for homeless? What about other people that are volunteering to help wherever they can? What about those, who brought food to fire fighters, when fires were raging?  What about the standard in some cultures to always share your food with guests, even if you have little food for yourself? 

Are they all stupid for giving away their own resources? Or are they human beings, who will lend a hand in case of emergencies? Do you believe in scarcity or abundance? I think this will show what a lot of people are made of. 

Lot's of tenants looking for free money. The commercial retail tenants some might have a valid hardship and others jumping on the train trying to get free stuff.

A landlord needs to set up systems and processes to QUALIFY the validity of what the tenant is claiming. If the claim is verified  then what the landlord and the tenant have in mind as a fair and equitable might be different. If the tenants looking for easy free money have to jump through a bunch of hoops to prove a hardship then for many the gig will be up and they will stop the process of asking.

It's not about landlords against tenants. It's about people in America having a common goal and plan where both can recover and get back to the strong economy we know we can achieve hopefully after this virus peaks and starts subsiding. 

@Michaela G.

Every example you gave of helping others has nothing to do with blindly giving every single tenant a discount for April. It’s your business so it doesn’t affect me, but what are you going to do if some tenants need assistance for months? Giving automatic rent reduction to everybody simply doesn’t make sense. Instead of the example of restaurants making food for the homeless, what you are doing would be like grocery stores giving out free food to everybody.

This is not a "one size fits all" situation. Some renters can pay their rent. Not everyone has lost their job. So, I feel the first step is to communicate with your tenants if they have been impacted by the virus, such as loss of job, become ill and unable to work. You should be communicating on this personal level with your tenants anyway (my personal belief). If they are impacted and can show you documentation (yes, proof should be required as some will take advantage of this situation), then you should work through a plan with them. If they still have their jobs, then there should be no reason why they can't pay rent. We have two teachers that rent from us. We sent them a kindly written letter and asked them to tell us if they've been impacted. We offered them to pay their monthly rent on the 1st or take a second option to pay half rent on the 1st and 2nd half rent on the 15th. They chose option 2 - and who wouldn't for cash flow purposes. We feel we've been flexible during this time and offered them some help. There will be some that will try to take advantage of this situation so getting proof of their changed situation should be important. 

I am happy and feel lucky to help my tenants out if they need it but let’s get everyone involved. Grocery stores can give everyone a break on groceries, banks can give us a break on our mortgages, drug companies can give people a break on their prescriptions... will it ever come to this?

@Jason Allen

Spoken like a true Broker with no skin in the game (no rentals:-(

We probably know more about our Tenants than we do about family members (Credit check and Google search). A quick call should let you know what's going on. If you can't do that, maybe you should be in the stock market. This is a people business and you may not realize the people skills and insight you already have. (or record the call and let your spouse listen to it;-)

Originally posted by @Heather Frusco :

@Jason Allen aside from you going on every post on BP and trying to desperately make your point... that LL's have a responsibility to support their tenants (other grown adults) and aside from you starting a thread telling landlords "to enjoy foreclosure"? in which the thread was ultimately removed... 

Don't know about you but having options available to tenants such as paying via credit card or taking out a temporary loan to make ends meet or waving certain fees... are options... which somehow you seem to disagree with because they aren't 'free'. Not saying LL's can't offer assistance but if they do... it is their decision to make... not an entitlement now and will never be, some just can't. Any assistance a LL can offer aside from their normal operations should be sees as a courtesy even if that option is solely the ability for the Tenant to make ends meet via CC - don't have to use it but for goddess sake stop asking for 'free' - all should take responsibility for their financial situation and stop expecting others to pick up their slack. I don't any landlord here wouldn't love to have any non-paying tenant END their lease and move out... so not quite sure what the argument is... MOST LL's WOULD ALLOW NON-PAYING TENANTS TO MOVE OUT... the reality which you fail to mention but which you are likely very aware as well as all other LL's is... that most non-paying tenants will not move out, so back to taking responsibility for your own situation... if a Tenant is unable to afford it and all the options offered to them just aren't their 'cup of tea' they can always downsize i.e. end lease and move out - most don't as we all very well know. 

 

Yea, I don't disagree. Being open to communicating with your tenants instead of attacking them out of fear is what I'm advising. I've seen several landlords in my market basically say "the tenant is in a legally binding contract so I'm fine as a landlord, I'll just get the money one way or another".

That's bad business which will end in them going Out of business. If they're looking for a fight you're going to find it.

 

Originally posted by @Gary L Wallman :
Originally posted by @Jason Allen:
Originally posted by @Gary L Wallman:
Originally posted by @Jason Allen:

I've been reading through the forums here and I've read a lot of posts about how the tenants should have the money saved up to pay rent in an emergency, and if not they should use a credit card or the money in their retirement account to pay rent.

Yes, they signed a contract to pay a certain dollar amount for a certain period of time but no one saw this disaster coming.

Instead of forcing them into debt or draining their retirement accounts why don't you just let them leave. Let them break the lease and go live with family or friends. Or you can give them a lower dollar amount to pay for the next 90 days.

The truth is that you should have adequate reserves for situations like this as a "professional investor". Try to have some compassion for the average person who makes very little money compared to you and probably lives paycheck to paycheck.

 Jason,

So now I'm a greedy pig because I expect people to pay me rent on a home I have a hundred grand invested in. As a "professional investor" I have purchased, renovated and made available a residence for a renter who would otherwise not be able to inhabit such a nice home. So then, I should allow them just not to pay me because times got tough for a minute.

News flash: It took years of hard work and sacrifice to build a Real Estate portfolio. Not 30 days of hardship.

Based on your less then brilliant criteria, there would be no "professional investors" in real estate any longer.  The masses would have no nice places to live and all would be fine in your make believe world.

Gary

Gary, I never said you were a greedy pig.

I'm saying that the world and the economy doesn't care about your hundred grand, they don't care about your hard work or You.

I've started and operated multiple businesses and I can tell you right now that hating the customer and treating them like cattle that pump out money is a great way to lose your hard earned business. A little compassion (NOT a slack hand doormat mentality) will go a long way.

 Jason,

Perhaps I misunderstood. My apologies.

I own seven small car dealerships in addition to my RE investing so I agree wholeheartedly about treating your customers well. Have to to grow, want to to be a human being.

Disagree a little bit about the economy. It may not care about my hundred grand or hard work, but it sure does care about all our hundred grands and hard work cumulatively.  Without producers, consumers have nothing to consume and cease to exist along with our economy.

Gary

 I agree.

I was making a very nuanced point here that only those experienced in business for probably 10+ years (long enough to go through ups and downs) are to be able to understand. Sounds like you've been around the block a few times as well.

Originally posted by @Anthony Wick :

I would think the mere fact that people are not stepping in line and defending the OP’s idea of free rent or free move out without consequences would be a wake up call to him that perhaps his ideas aren’t good. But, nope. Even when I quoted him he insists I haven’t read his posts.

A great majority of us will work with tenants that are affected by this. But also, a huge majority of us are not going to sacrifice our holdings for free rent offers and/or free move outs. Of course, a vast majority of tenants aren’t going to simply move out just because you make the suggestion. That’s a pipe dream. Most don’t have an option to move somewhere and live for free.

It’s baffling that he thinks the only two options are giving tenants something for nothing or you’re immoral. Of course, he also thinks a tenant should be able to hoard retirement funds and college savings instead of paying rent, and also thinks a tenant is the landlords responsibility.

 You sound like the main stream media, repeating something enough times hoping it will become true.

I never advocated free rent Anthony.

Simply 1. negotiate on a lower rent in the mean time or 2. let them break the lease and get a full paying tenant in the door.

How is that not easy to understand? I literally can't spell it out any simpler for you.

Originally posted by @Joe Villeneuve :
Originally posted by @James Wise :
Originally posted by @Patrick M.:

@James Wise, the original poster does not own properties. He has an interest in piling on landlords because he (proports) to have numerous outstanding leases on a number of rentals that he sublets on Airbnb. When things were going good, he told us all we were fools... now that things have gone south he wants to be able to simply "walk away" from the leases... He has started this thread purely out of self-interest. He has absolutely no interest in business models or anyone else's side of the story.

 Ahhhh no, you're not telling me he's one of those rent out a landlord's house then Airbnb it dudes are you? lol, good God. The Airbnb sublet business model makes wholesaling look intelligent.

 LOL.  You gotta be kidding me.  I went back and read that he says he owns 500 units, but in another post he says he's doing the AirBnB arbitrage..and combined together he says he owns "500 units"?  BS!  He doesn't own ANYTHING.  He has little or no financial responsibility, and he has the nerve to call out all those that do for not giving away the farm?

To be fair, maybe he should put an add out saying all of his 500 units are available for free, as a place for all of those tenants leaving their rental homes.

Maybe this is what I get for not publishing my portfolio on the internet, sorry I'm a private person.

500+ Class B MF units

I do Airbnb arbitrage (rental arbitrage) and then invest that cashflow into the MF apartments.

I also have build, operated and sold companies in other spaces as well but all the money gets funneled into MultiFamily.

I'm not going to go back and forth with you... No good deed goes unpunished as they say, hopefully you won't have to learn the lessons I've learned, but continuing to disregard advice is a great way to accomplish that. Good luck.

I've been a foster parent, volunteered for the humane society, learned Spanish fluently helping migrant farmworkers for free, am vegan for ethical reasons, have a bird refuge and a zoo of rescues. I will be fair and work with my tenants but my rentals, all bought right before the 2008 crash, are not a charity. 

Originally posted by @Jason Allen :
Originally posted by @Joe Villeneuve:
Originally posted by @James Wise :
Originally posted by @Patrick M.:

@James Wise, the original poster does not own properties. He has an interest in piling on landlords because he (proports) to have numerous outstanding leases on a number of rentals that he sublets on Airbnb. When things were going good, he told us all we were fools... now that things have gone south he wants to be able to simply "walk away" from the leases... He has started this thread purely out of self-interest. He has absolutely no interest in business models or anyone else's side of the story.

 Ahhhh no, you're not telling me he's one of those rent out a landlord's house then Airbnb it dudes are you? lol, good God. The Airbnb sublet business model makes wholesaling look intelligent.

 LOL.  You gotta be kidding me.  I went back and read that he says he owns 500 units, but in another post he says he's doing the AirBnB arbitrage..and combined together he says he owns "500 units"?  BS!  He doesn't own ANYTHING.  He has little or no financial responsibility, and he has the nerve to call out all those that do for not giving away the farm?

To be fair, maybe he should put an add out saying all of his 500 units are available for free, as a place for all of those tenants leaving their rental homes.

Maybe this is what I get for not publishing my portfolio on the internet, sorry I'm a private person.

500+ Class B MF units

I do Airbnb arbitrage (rental arbitrage) and then invest that cashflow into the MF apartments.

I also have build, operated and sold companies in other spaces as well but all the money gets funneled into MultiFamily.

I'm not going to go back and forth with you... No good deed goes unpunished as they say, hopefully you won't have to learn the lessons I've learned, but continuing to disregard advice is a great way to accomplish that. Good luck.

 Hey Jason,...ever hear of something called a mirror?

Originally posted by @Jeff Cagle :
Originally posted by @Jason Allen:
Originally posted by @Patrick M.:

@James Wise , the original poster does not own properties. He has an interest in piling on landlords because he (proports) to have numerous outstanding leases on a number of rentals that he sublets on Airbnb. When things were going good, he told us all we were fools... now that things have gone south he wants to be able to simply "walk away" from the leases... He has started this thread purely out of self-interest. He has absolutely no interest in business models or anyone else's side of the story.

 Ha... not true I own over 500 MF units, and I'm not walking away from anything. 

I have a hard time believing that anyone owning 500 units would be spending their time on cockamamie STR arbitrage schemes. Probably making use of:

The BP two step shortcut to owning 500 units

1: Invest $5,000 in a syndication that buys a 500 unit development

2: Claim to own 500 units

I've seen it far too many times.

 

I used to think that people could think for themselves. That they could recognize truth and wisdom when they encountered it.

A mentor of mine years ago told me that "there is no competition, because so few people actually recognize a good strategy when they see it, they either think that it's too good to be true or that they don't believe they have what it takes."

I've slowly and regrettably learned how true this statement was over the years. 

Good luck

Originally posted by @Mike Hurney :

@Jason Allen

Spoken like a true Broker with no skin in the game (no rentals:-(

We probably know more about our Tenants than we do about family members (Credit check and Google search). A quick call should let you know what's going on. If you can't do that, maybe you should be in the stock market. This is a people business and you may not realize the people skills and insight you already have. (or record the call and let your spouse listen to it;-)

Mike,

Yes I have Airbnb listings using rental arbitrage.

I also own commercial multifamily, and more than that to be honest.

I'm not going to say it again.

 

Originally posted by @Joe Seegers :

you guys have to realize you should work with tenants,because if this last along time like 2008 ,you will realize what i mean.sure everyone should be able pay their rent with their stimulas checks.sure you might have to workout payment plans to they get them.but after that it might get rough ,if the goverment does not get people back to work.what choice to you have,a tenant you know,or a complete stranger without a job.alot of you where not around in 2000 and 2008.this market could get real bad.like now if you advertise a place you get a good responce to look at it.in 2008 you would advertise and hardly anybody would respond and if they did they wanted 1 or 2 months free rent.i would prefer to work with tenants now,and i can already  know which tenants its going to be.it will be the 10% of tenants you always have to remind to pay.90% of your tenants will find a way to pay.we  all know they signed a contract to pay,just be nice if they work with you,maybe stop late fees or reduce them.but to forgive the rent is another story,unless the goverment forgives our taxes.you got to realize now you should be in survival mold,for i can tell you if you make it threw their should be sunshine at the other end.because most new building is coming to a halt,most remodeling coming to halt ,most family being home more ,which maybe creates larger family,and when this done most banks will have even more tougher standards for a loan ,like 6 months reserve for a borrower.so down the road rents will rise probably more then before this crisis.so just hang in their and develop a plan you your situation.so look as this as a bump in the road.and if you live in wisconsin ,you should know by the amount of potholes we have

 I think there's a lot of wisdom in this post that the readers should pay attention to.

Originally posted by @Sid K. :

This is an unprecedented health and financial situation , so we are being flexible and trying to be a part of the solutions :

  • 1) If our tenants alert us to their inability to pay rents - we are being compassionate and listening.
  • 2) We are asking for little more background on their situation ( Lost job ? sick ? someone in the family sick ?)
  • 3) If we think there are genuine reasons , we are offering a combination ( not all) of the following options
  • .   3.a) Waive late fees
  • .   3.b) Adjust their security deposit for the next months rent
  • .   3.c) Offer flexible termination of the lease, if they want to vacate and move with family
  •     3.d) Offer them additional 30 days to pay current rent.
  •     3.e) Issue a notice to them that is empathetic to their situation , but also puts the eviction process rolling so it         can be executed once we we want and are legally able to.
  • 4) If we believe that they are taking unfair advantage of the situation and not paying rent ( They still have their job , no sickness etc) - we are providing them a notice to intent to evict as soon as we are legally able to.

Welcome thoughts on anything we can do different.

Thanks

Sid,

Can you explain to me why all the posts that make sense (like yours) always seem to get the lowest amount of votes and feedback?

 While one's charged with emotion and resentment and false statements are celebrated.

Do you think that maybe people here don't actually want to be productive?

@Jason Allen I'm confused bad business for who? Like I said... most LL's WILL allow a Tenant to break lease if they can not afford rent... majority of Tenants will however not move out... living expenses come due one way or the other... again they don't just disappear into thin air. 

Originally posted by @Karen Mills :

I've been a foster parent, volunteered for the humane society, learned Spanish fluently helping migrant farmworkers for free, am vegan for ethical reasons, have a bird refuge and a zoo of rescues. I will be fair and work with my tenants but my rentals, all bought right before the 2008 crash, are not a charity. 

 And the claims that you should have not been made by anyone here. 

Originally posted by @Larkin Adey :

@Jason Allen - I'm not sure the exact % of landlords who are accidental and own 1 or 2 rentals, but I think it is something staggering, like 50% of all rental properties. Many of these folks are the ones who may be in for a rough ride. They may also have lost their jobs, have mortgages to pay etc. etc. Your logic from another perspective sounds like this: "Banks shouldn't force us to make payments on vehicles, credit cards, mortgages, student loans & SBA loans, because unlike most people, they have unlimited cash due to quantitative easing..." It doesn't work like that. When we enter into contracts - be they leases, mortgages, loan agreements, revolving lines of credit - whatever - we make the commitment to pay our debts, regardless of the situation. I plan to work with my tenants and would like them to feel comfortable staying in their homes, but they need to do everything within their power to make good on the agreements they have with me. I will do everything in my power to ensure they have a nice home to live in, free of crime, with no roaches or mice and if issues arise, I will promptly fix them (The right to quiet enjoyment) - That means sacrifices for all of us.

Just as a data point Chris C from Memphis made a post a few years back and posted their stats of the 2k or 3k homes they have sold over the years and manage.. as you said and going on memory here but it was certainly the majority that only owned one or two homes. and when it got real thin when you got to 5 or over.. now that was a few years back.. but I did find it interesting.. 

 

Originally posted by @Al Pat :

@Jason Allen I think most landlords know cost of turnover is far more expensive then reduced rent. I always try to find creative solutions for my tenants in need where they can pay weekly or biweekly, I also deferred rent up to two months and allowed them to get on payment plant and that was even before COVID-19. Granted, these exceptions are truly by expectation based on their past payment history, how they care for the unit, their communication with my team and mainly their attitude towards us. However, will see how this situation is impacting our most stable tenants.

you would think that but there are a lot of newer landlords that have not put that knowledge in their knowledge bucket and have to go through the eviction turnover route to get the experience to put in their Bucket..