Self-Managing as an Owner; A Secret Agent's Advice

[Wesley Sherow]

Bigger Pockets Community,

I wanted to share a bit of advice I got a while back that's common knowledge for some, but a good tip for others just starting out. When you purchase your first investment properties and you decide to self manage on them, you're a property manager. Now, property managers often follow the rules/regulations of the market, their firm, and instructions that the owner of a property has given. With this in mind, you're allowed to be a little secretive with tenants. Whenever I go to properties that I personally own to collect rent, check on service, or do any kind of work, I never tell tenants that i'm the owner of the building. Why? Because owners of the building have more decision-making power. Instead, when you're on a property just let your residents know that you're the property manager selected by the owner. This lets you work around any basic rules/expectations without having to make special exceptions for tenants. I'll share a quick example where this served me in the past.

I had a tenant who wanted to vacate the property before the end of their lease. It's not common, but it's known to happen occasionally. In those situations many people may do their best to help a tenant, re-list the apartment, make exceptions on rent expectations for the term of the lease, etc. In these cases you may easily find yourself wrapped up in more work than necessary being reactive to the situation and trying to negotiate and work with the tenant. I've found that if taken on a different approach wherein you're just the property manager, it's a lot easier to enact and enforce rules that are simply "the way things are." In this case what I ended up doing for this tenant that didn't know I was the owner, was I let them know that our property management regulations stipulate a two-month lease break fee paid before lease cancellation, including all past due rents if any. In this case the tenant tried to negotiate, but there's really nothing I can do because this is the owner's wishes and it's also the regulation of the property management company. At the end of the day, the tenant ended up agreeing and making the payment.

Besides the fact that I was able to avoid a lot of headache in assisting the lease break, or conflict in arguing why I won't let them out of their lease, the rules book did all the talking for me. It's an easy way to say "unfortunately it is what it is, I wish I could help you." The bonus added affect from this is if you for whatever reason decide to give the tenant a break from whatever "the rules" are, you're now doing them a major favor! It helps set the baseline expectation, and anything above and beyond is much appreciated cooperation by the resident. 

Take it for what it's worth, but over my morning coffee this morning I thought i'd share! How do you interact with your tenants - as an owner, or as a property manager?

[Drew Sygit]

@Wesley Sherow been saying the same thing for years!

Nothing good comes from a tenant knowing you're the owner.