Lying to Tenants about ownership???

Question

I'm doing a lot of research before I start my journey into being a landlord real soon. I'm seeing a lot of people advising that it's a good idea not to reveal to tenants that I own the building. However, I simply don't get the benefit of lying, especially in the case of a house hack. Can someone help me better understand this? A quick Google search shows who owns a building so it all seems pointless to me.

Account Closed · Answer

Its a negotiation and distancing tactic for people uncomfortable or unfamiliar with being a landlord. The 'owner' set the rules, the manager is just following them.. If the tenant questions something or starts pushing a boundary, the 'owner' is the bad guy. If an akward decision has to be made, the 'owner' needs to be consulted. Being a self-managing owner is a very weird power dynamic at first, and how to play the role smartly, fairly but honestly isnt really taught anywhere that I am aware of.

I think its a newbie move, and I did it too at first. Now  i only do it during showings. People try and hustle you more, and will act differently based on how much power they think you have. During showings I just tell them i do all the maintenance and there to show them around, and if they ask, I get vague about how application decisions are made 'later' and a 'whole process'.. not lying but diverting.  if they press about ownership I just say its all 'professionally managed' and I try and figure out their concerns.. Too much pressing or asking if we are a 'private landlord' have been red flags. The reason I do this during showings is trying to get a feel for who the person is as if they were dealing with an unimportant nobody. I also try and be talkative and goofy, trying to figure out if they have a victim mentality (aka the world is always against them and nothing is their fault) or if they have major issues with authority. Those two factors have been the biggest 'bad tenant' psych factors I have found. (I am still small time though)

However, once someone is approved (or likely will be) and before they sign the lease, I have 'the talk' where i tell them I am the owner and then set expectations. If they arent comfortable with things they can move on. The psychological stuff involved in being a self managing owner could fill a book. Its probably the most emotional rollercoaster 'job' ive ever had.

Jill F. · Answer

I couldn't lie about it. I'm a terrible liar. I tell all tenants that I own the building and the buck stops here-- they all (59 units) have my personal cell phone number so they can call me directly if there is a problem. It helps to have clear policies that you implement consistently. I already know in advance the answer to most upgrade requests. (I charge). I know in advance on late rent. I know in advance on pets. When I don't know, I just tell them I have to think about it and I'll get back to them.

Steve Rozenberg · Answer

I 100% agree with @Nathan G.. You are running a business not teenage friendship circle. How you to the little things is how you do everything. There is no shame or nothing wrong with being a landlord. Now adays in technology I would say assuming someone can not find the owner would be absurd. I do like the partner (higher power) comment. I would further suggest that you run your business with standard policies and procedures that do not bend. When you accept a tenant give them a tenant handbook that explains your policy. This is the same if you got hired at a job, or any other company. Have rules and policy that YOU follow and expect the same from them.

This is where so many self managing landlords get in trouble with fair housing violations by not have strict adherence to their policy and treat one tenant different then the other or they are not consistent with the signed contract (the lease)

I think being a business, upfront honest and having rules, policies and procedures is key for long term sustainability.

Nathan Gesner · Answer

You shouldn't build a business on lies. It will come back to bite you eventually.

When Tenants know you are the owner, they can manipulate you much easier and they will try much harder. The really bad tenants will only rent from private owners because they know how easy it is to manipulate a private Landlord vs. a professional management company with established policies and procedures. I have no problem managing 400 rentals for other people but I don't manage my own rentals because I tend to make concessions I shouldn't. After all, it's my property and I don't need to make top dollar, right? It comes back to bite me every time! Now I make my employees manage my rentals because they follow procedures every time and protect me from my own stupidity.

The best option is to develop standards and just honestly stick to them. If the individual is pushing for something, tell them you have to consult your partner before any decision is made. That will give you the opportunity to distance yourself, "consult" your spouse or a piece of paper, and then respond professionally through email, text, or some other means.

Dan Maciejewski · Answer

I don't think lying can have any real good outcomes in the long run.In my experience, the bad tenants tend to self select out when they know the owner lives on site.  That's if you're not a pushover, though.  My partner has the benefit of managing around 300 employees so she's very good at setting expectations and interviewing, which are really the 2 things a landlord / property manager needs to be good at.

And anyone that tries to get us to change our rules on the tour or tries to bully or "be the expert," or argue about rules is never going to be approved, anyway.  So it doesn't matter if they know we own and live there.  Our tenants that we've placed are always great people and treat the property very well.

Aigo Pyles · Answer

A good foundation for landlord and tenant relationship should be based on honesty. Lying won't help. You have a choice not to reveal that you are the owner of the building or you can also say that you have partners.

Adam Martin · Answer

I think the major benefit to it in a house hack is keeping your distance.  If they know you are the owner and also live next door they are more likely to bother you and you have more interaction.  A lot of people are not comfortable with this and have a problem setting boundaries and for them this may be a good strategy.  For my SFH's though I tell them I self manage a few properties and am the owner and get a lot of positive feedback.  A lot of people like the idea they are not just a number in a large corporation and everyone has my cell which is posted in my listing.  On the initial showing I try to be pretty laid back and informal, it is amazing what people will say once they get too comfortable.  Sure some people try to play that against me and hope I am a novice who will fall for their stories but they quickly learn that I'm not falling for it.  Now to my defense for big decisions I do need to speak to my wife who I refer to as such vs. my business partner who is both.  She wants nothing to do with the rentals, has only seen them a couple times, and none of the renters have ever met her and they will not.  I also prefer to only communicate through text so it gives me a while to think of what I want to say and I can choose my words carefully.  On more than one occasion I have written a response that felt great but was less than professional.  I deleted it, cleared my head, and handled my business in a clearer way.

John Delano · Answer

If you don't deny ownership you can always point out that decisions aren't all up to you. Claim a a partner or whoever must approve if you don't want to be pressured into a decision. If it's more than just one house there are probably others involved anyway.

Kathy Johnson · Answer

Some of the people who use this, use it to delay giving an on the spot answer about things.  In our case, we don't pretend not to own the property, but we do tell them that we have to discuss with our partner (since usually only one of us is at the property this give us time to discuss the issues and make decisions that aren't hasty.)

Lying to Tenants about ownership???

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