Building a Personal Relationship with Tenants - Good or Bad?

55 Replies

I hear a lot on the podcasts and have read on the forums that many property owners pretend that they are not the owners of the property when they meet a tenant or potential tenant.  Instead, they lead that person to believe that they just work for the owner. They don’t want the tenant knowing who they really are.  

So I tried following that same pattern by trying not to have much contact with tenants or potential tenants and just having my assistant be the go between for everything. Then I met another investor who had a few rentals he was selling and I was looking at buying his small portfolio.  He set up a time for me to go take a look at the houses and when we got there his tenants were happy to see him and gave him a hug and talked with him about how things were going as they showed the house.

I compare that experience to a different experience I had where we purchased a property that had 2 homes on it where the tenants had no relationship with the owner. It was very difficult to get any info about the tenants before we purchased the property and soon after we purchased it the tenants in one house moved out.

I realize this is a very small sample size to draw any conclusions from, but I guess I want to challenge the belief that it is better for the owner that the tenant not to know who he or she is. Real estate is a relationship business after all, therefore, would it not be better to build relationships with tenants?

@Shiloh Lundahl Since I invest out of state and use a property manager I don't really have the pretend to be an owner or not.  When I visit my units it's with my property manager (unless I'm just driving by) so I don't have to "explain myself" to anyone.  I just avoid the whole issue all together.  I only want one, single, voice for the property.  Since I'm not the property manager I keep my mouth shut :-)  

But let's say you do form a good relationship.  They are happy to see the owner.  What happens when you buy the property?  Do they move into one of the previous owners other units for rent at turnover?  Do they love the owner because they don't enforce late fees if they don't pay the rent until mid-month?  Do they look at a potentially hartless landlord that's going to raise rents because you're not their lovey-dovey owner?  So there's really just as many ways this can go wrong as it can go right.  My experience with owners knowing tenants was good in one case and in the other I heard (post-sale of course) about all sorts of verbal promises the owner made (not on the lease) to tenants.  So if the previous owner had stayed away from the property and just let his PM manage it I might have had less turnover the first year.  

Who knows, it was still a small sample size and I'd have to assume that the tenants were telling the truth and not trying to take advantage of a new owner/PM.  And, to be honest, I think there's benefit to being at arms-length with tenants.  That way you can never be accused of treating one differently than the other.  If you're good friends with one tenant and not with another (this applies more for apartments) the "non-friend" tenant that gets hit with a late fee may throw an unjustified fit.  It's just more hassle and the potential for the appearance of favoritism.  

Now, I will say this, if the tenants don't like you that's another ball of wax entirely.  I've went to view properties and the owner/PM isn't there but the tenants were there to let us in (they knew they were coming).  Oh I heard everything from stories about roaches to how one of the units was broken into when it was vacant and use as a place to smoke crack and everything else under the sun.  So there is MASSIVE DOWNSIDE if your tenants don't like you!     

@Shiloh Lundahl

First off, i have only had 4 rentals ever that i have owned.  My thought is that I have been very friendly with my tenants in the past, and they all had my personal cell number.  I learned that somewhere in the middle for me is the best way.  If a tenant sees me as more of a friend, then it makes it more difficult to charge late fees, charge them for damages, etc.  I feel that creating the same relationship with contractors is beneficial as well.  


I would definitely say bad in my experience, I bought 2 duplexes and a four unit from the same owner. His old tenants absolutely loved him for all the wrong reasons. He rented all his units for 25 percent below market on average. He never charged late fees they were all his "friends" fast forward 2 years and all the units have been turned over the average rent is increased by 25% bringing everything back to market. However we didn't keep a single tenant there was no possible way to keep them after him he had essentially spoiled them. 

Allow me to opine:  real estate is a business.  Being friendly and courteous is good business.  Being FRIENDS with a tenant is entirely different, and I would NEVER recommend it. 

Suggestions--be fair but firm, stick to your written policies, treat all people equally, do not get involved in a tenant's life or drama.  Keep emotions out of it as much as possible (easier said than done, I know).

If you feel uncomfortable saying you are not the owner (when in fact you are) consider putting your properties in an entity, ie; corporation, LLC, trust, etc. Or if you are married or have a partner, any final decision must be run by them.

This advice might not sound very warm and fuzzy, but it will help you make necessary business decisions as they come up, and that will minimize emotional and/or financial harm to you.

Hope this helps.

I have a good business relationship with My tenants. Its more like a supervisor/employee relationship than anything else-- but in an industry where good employees are highly valued and hard to find.

I appreciate the feedback.  What it seems like people are saying is that it is harder to have appropriate boundaries with people you know or people who are close to you.  

I think @Andrew Johnson made a good point with out-of-state properties to not get in between the property manager and the tenant.  This makes sense since the PM has a system already in place, knows the community and the clientele, and probably has much better resources than the out-of-state investor has.  So I agree that wouldn't be helpful to get in a situation like that.

@Adam Drummond I agree, I think that somewhere in the middle is probably the best way.  I like what @Jill F. stated calling it a good business relationship.  I think it can be seen as your tenants are your customers and having a good working relationship with them is probably going to be best overall.

@Philip Williams I agree that it is difficult to take over a property that hasn't been managed as a realistic rental and then start managing it as such without the tenants becoming frustrated.  How did this property end up working out for you?

They ended up working out great once we got new tenants in at market rents lol. I had one tenant yell at me and tell me how I would never be as great of a landlord as the previous landlord. I responded your rent is 33% under market for this area why do you think he sold the building? He was a super nice guy but he wasn't making enough money to further his investing because he kept accepting sob stories from tenants like you. His rent was 400 for a 3bd 1ba market is 600. Extrapolate that across his portfolio and it's easy to see why this landlord wanted out. 

@Marc Winter I think what you said about sticking to written policies and treating people equally is definitely the key.  

I have a commercial building that I have a therapy practice out of and before I owned the building I was just one of the renters subletting from the therapist who had the master lease.  When I purchased the building the dynamics changed and it was difficult for some of the more seasoned therapists in the office.  A few of them felt entitled to not follow the new lease agreements.  It took some time for things to settle and there were some frustrations along the way because of their expectations of keeping everything they same way as they had it before.  

Eventually some of the therapists moved to a different location and the atmosphere really improved.  So I understand how taking over a property can have its challenges.

I am friends with the therapists in the office, yet I still charge them if they turn their rent in late.  Even though we are good friends, it doesn't change that fact that late is late and I enforce the rental agreements.  Doing this has not changed our relationship at all.  They understand that I am their friend and their land lord.  And that I am friendly and absolutely follow through with the agreements.  

I think that teaching Love and Logic Parenting classes over the past 8 years out of my office in Mesa, Arizona, has helped me learn how to have empathy for other's situations while still handing their problems back to them in a loving way and being a support to them as they work through those problems rather than rescuing them from those problems.  So I like what you said about being fair but firm.  I think too many people confuse being nice with releasing people from their agreed upon responsibilities.  I think it is definitely possible to be nice and hold people accountable to what they have agreed to do.

@Shiloh Lundahl I don't try and hide who I am and am kind and friendly to tenants. I'd like then to stay as long as possible. When I had some issues with late payment, I referred back to the lease and the lease was the bad guy. It worked fine.

In the beginning I was managing the properties and I quickly realized that tenant would try to get away with things if you befriend them.  Now, there is another school of thought that argue that good things came from tenants knowing the owner.  It probably is the case depending on the location, type of tenant, and type of your own personality.  Now that I have tried both, I like maintaining a business relationship with them but no befriending them.  It just didn't work for me.  I think it is worth to try to both, assuming you only have yearly lease, you only have to put up with them for a year.  

@Shiloh Lundahl I think the piece your not considering is the difference between owner and property manager. A good PM will have good relationships with tenants but the tenants do not need to have relationships with owners. I own rentals and I manage other people’s rentals, it didn’t take me long to realize that I could have a much better relationship and more business like relationship with my tenants when the believe I manage for the owner(s).

We should always be polite and respectful to people in any dealings weather it’s a cashier or a tenant but it’s not a good idea to become friends.

If you had a friend type relationship with a tenant would it be easier or harder to evict them if they stop paying rent?

The idea is to be the manager which is completely true if you don’t hire a PM. It’s not the tenants business who owns a property, all they need to be concerned about is who their contact is for pro terry related issues weather it’s the manager or the property owner.

Have you ever rented at a large apartment, they usually have employees running things and you have no clue who the deed owner is, it’s not relevant as far as the tenant is concerned.

IMO manager vs. owner is a personal decision and can be done either way,personally I am completely on the manager train 😃 tenants are more likely to make strong demands if they know you are the owner.

This is a great question, Shiloh Lundahl.

For me, it’s all about relationships and trust. I’m not going to become “friends” with any of my tenants, but I want them to know I’m available, within boundaries, and responsible. I want the tenant to know that I care about the house, just like they do. Each has my cell phone and knows to call or text me if there is an issue.

I do want to note that my buying criteria is different than other investors. I love rentals in which the tenant has lived there for a while. I want the tenant to view the home as their home, rather than one small part of a portfolio. And I’ll take below market rents for that if the numbers still make sense.

What I’ve found in my target neighborhoods of Atlanta, is that the tenant will alert you to a small issue before it becomes a major issue. That lets me get ahead of the potential headache of an unreported issue. As as landlord, you’re going to deal with it one way or another. As both an agent and investor, I’ve seen the ramifications of letting small issues slide - ie any water leak.

If you are managing the property yourself, my advice is to give the tenant your info and be a good landlord. You can easily separate the baseless claims from the real issues.

Please note: I own lower end rentals so I don’t get the same complaints I get on the higher end properties I reluctantly manage.

I'm a police officer as well as a real estate investor and I've found there are several parallels. People are people and if you set out to treat them fairly, with respect and understanding, you can many times, though not always, get the same in return. Be honest and up front with people and most of the time they will respect and appreciate you for it. To me that is a relationship worth having.

Hello Shiloh. I just read your post and I had to reply. I too have heard and understand both sides of that argument. I truly believe that nothing replaces a good rapport with anybody. Granted, I am on the small side of investing, I have 17 single-family homes. However, I know every tenant and make it my business to know much about their lives. I truly Believe that because of this rapport it has been almost 6 years since I’ve had a vacancy. If a tenant or family wants a larger or smaller house, they call me first before they look anywhere else. I treat them with dignity and respect and through the application process explain to them that that’s what I expect in return. In the last 10 years I have only evicted one person. That’s not to say I haven’t had turnover, but it is negotiated and we peacefully go our separate ways. I believe this model has saved me tens of thousands of dollars in repairs from disgruntled tenants, and also has saved me so much money in turn over costs. Generally by the time somebody is moving out of their property, I have somebody slated to move in within 48 hours. That’s also part of the report, allowing me to show the property as soon as they put in their notice. This is just personal experience, but I hope it helps. Happy investing!!!

I think it depends on your management style, but as you get more and more units you will naturally have to pull back a little.

We manage around 1000 units and if gave every resident my cell phone life would be insane trying to answer every call. Another issue is accidentally playing favorites. Can get messy fast and create unrealistic expectations from residents since they know you.

From my experience be fair, friendly and firm to the lease. Ensure maintenance is done timely, managers are friendly/professional and answer calls promptly.

If you look at bad reviews on PM companies you will see maintenance issues, staff that doesn’t care or respond at the top of the list.

I do think having activities for residents, charity participation and always being friendly and courteous goes a long way. As a company my goal is always being accessible with 24/7 lines that are answered in English or Spanish.

As an owner I never advertise that I am the owner, but Make sure residents are heard and cared for with every personal interaction. Goes a long need to make them “raving fans” of your property and services.

I think of my tenants as my office colleagues. Just like office colleagues, we are cordial but it’s a strictly business relationship.

I don’t want to know about their personal matters and I don’t want them to know about mine.

I am cordial and reasonable so that they would want me to have their landlord but my cordiality would never be at the expense of my business.


I've walked on both sides of the roads and I've come to the conclusion that keeping the relationship strictly business is the best road for me to walk.  I made friends with all of my tenants when first starting out and it usually involved "favors" and "special requests" or leniency on late fees, ect.  

I found it harder to say strict when there was a "friendship" or any other kind of relationship involved.   Keep it simple, keep it professional and don't make friends with your tenants.  Business will proceed much smoother this way

I own an office building and I know some of my tenants personally. When I bought my property, it was in shambles. I made it a commitment to visit the place at least once per week to make sure issues were addressed in timely manner and to get a feel for the property. During some of my visits, I ran into some of the tenants and we had a quick chat. I think the key is really to keep the relationship at a professional level. Be friendly and courteous, but do no deviate from the terms agreed upon. Tenants must know what your expectations are and in case there is any doubt, you make sure to clarify it. However, you should NEVER allow them to get around your property manager. In case of any late payments, deal with the property manager and the terms of the lease, not with me. I told my tenants that I don't deal with late fees. My PM will tell them what's in the contract and they are to oblige.

I would say bad to develop a personal relationship, but it's good for business for them to have a good relationship with you, and trust you. All our tenants have a good relationship with me and our vendors, but it doesn't delve into it being a personal relationship, and they have to know that you are not there to be your friend. It's just like managing any business and keeping your employees in line. 

In my opinion, it varies person to person and every individual tenant has to be dealt in a different way. Bottom line is to keep a professional distance and interaction to have know-how on what is happening with the property as ultimately when the eviction of the property happens, no matter how good you are, you will be left with repair works as a return gift. 

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