What Was the Most Surprising Thing You Learned When You Became a Landlord?

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Every landlord is swimming in cash. All you do is buy a property, find someone to rent to — and bam, you’re loaded!

HAHAHAHAHA!!!

Real life does NOT work like that. Oh sure, you can create wealth through real estate, but it certainly isn’t a get-rich-quick scheme.

You have this vision that you will buy a property and rent it out. The tenants will pay rent on time every month, cover the mortgage, taxes, and insurance plus put a little into your pocket, and it will be an easy, hands-off way to make money.

It can happen, but you have to put in a lot of upfront work to get easy tenants who pay rent every month on time. You have to buy right in order to have the rent you charge cover all the costs plus put more into your pocket.

I’ve seen many experienced landlords share their mistakes, and many of them are the same mistake.

Let’s skip the School of Hard Knocks today and talk to some of those experienced landlords. Let’s find out the most surprising things they learned when they became landlords.

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Tenants Aren’t Always 100 Percent Truthful

“I think the most surprising thing is just how much you get lied to. I don’t mean to sound like a misanthrope — most people are good. But when you are a landlord, you will get every “my dog ate my homework” or “I don’t have any felonies so why check my background” excuse you could imagine. — Andrew Syrios

Related: The Unsugar-Coated True Story of What it Takes to Succeed as an Entrepreneur

“I tell all people who want to be landlords the most important fact to remember is TENANTS LIE  — whether it’s why the rent is late or some other small thing, even if it is not important. TENANTS LIE. You can’t take it personally, it’s just a fact of life. You need to learn to read people so you know when they are lying, and know when to let the lies go because the lie they tell you doesn’t matter — and when to not let them go because that lie does matter.” — Russell Brazil

Midnight Emergency Phone Calls Aren’t That Common

“When I first became a landlord, I remember being surprised at how few middle-of-the-night calls I got. You know — the kind that everyone talks about like they happen every night. In fact, I’ve only had one middle-of-the-night call in the past decade that forced me to get out of bed, with hundreds of tenants.

Do emergencies happen? Definitely, and sometimes they don’t happen between the hours of nine and five. But most problems don’t need to be fixed immediately, and even when they do, it’s usually just a phone call or two to get it fixed. I feel that the ‘middle of the night phone call’ is one of the biggest fears that newbies have that holds them back from buying rental properties — but it’s honestly not a big deal. Besides, even if I have to get up in the middle of the night a few times per decade, somehow I think it’s worth it for the financial freedom I get the rest of the time!” — Brandon Turner

You HAVE to Properly Account for CapEx

“My most surprising lesson as a new landlord was also an expensive one. I learned that repair expenses can eat up all of your yearly cash flow and more. When I started, I wanted so badly to make a deal work that I fudged on the repair expense line item when evaluating a deal. For example, I thought repairs of $50/month on a standard house were reasonable. But it only took one $4,000 HVAC system replacement to dwarf my tiny repair budget! Now I include both maintenance expense and future replacement of capital items — like HVAC, roof, driveways, and more — in my upfront estimates.” — Chad Carson

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Tenants Don’t Read the Fine (And Not-So-Fine) Print

“Tenants don’t read. I have posted an ad that says, ‘Rent is $1,000 a month. First month’s rent, last month’s rent and one-month’s rent for security deposit due at lease signing. No Pets. Located near Roselle and Golf in Hoffman Estates. Must have at least $3,000 per month in verifiable income and submit to a background check.’

Related: 6 Insane Landlording Stories That Prove the Importance of Tenant Screening

And without fail, I get phone calls asking where the property is located, if I allow pets, how much does it rent for, will I do a background check, and do I require a security deposit?

If you have something you want a tenant to know, tell them in writing, read it to them, and have them initial it that they have read it, so when they say, ‘You never told me that!’ you can show them your proof.” — Mindy Jensen

It Takes Work, But…

“Despite how being a landlord comes with many challenges and inconveniences, the time and effort it takes to be a good landlord is way less than the time and effort it takes working 9-5 making someone else rich.” — Johnny Youssef

And Five More…

  1. Common sense isn’t common.
  2. If it isn’t written down, it doesn’t exist.
  3. Treat people at your rentals like a business customer, not a friend.
  4. Have a GOOD Banker, and a reserve fund account.
  5. Your police department is your new best friend. — Deanna McCormick

All the preparation in the world won’t actually prepare you for every situation — because sometimes you just have to scratch your head.

What was the most surprising thing you learned when you became a landlord?

We want to know! Be sure to share with a comment!

About Author

Mindy Jensen

Mindy has flipped numerous homes in the past 10 years, one at a time and doing much of the work with her husband. She lives in Longmont, CO, and is always looking for an ugly duckling to turn into a swan.

13 Comments

  1. Nathan Gesner

    Good article, Mindy! My biggest lesson was how often tenants lie. They lie to get in, lie to pay late, lie about who is responsible for the door that was kicked in, lie about why they are breaking their lease, lie about how clean they left it. Thankfully, I document everything and I have solid policies and procedures in place to deal with all of these quickly and professionally. As you said, don’t take it personally! Hold to your standards and they will almost always back down.

    • Besim Kuduzovic

      Mr. Gesner
      could you, please share your policies and procedures with newbee landlord as me?
      Just being landlord for less than 6 months I had to replace dishwasher that was 4 yrs. old, blower motor in furnace that was 5 yrs old, and bunch of sprinkler heads and pipes during summer.

  2. Jerome Kaidor

    WRT phone calls – an *extreme* time-waster, especially when you have a vacancy in a desirable area. I have
    set up a system where my contact info in my craigslist ad is a text-only phone number. Texts come in, my computer converts them into emails. I answer their questions via email, and the computer turns my answers into texts to their phone.

    After answering their questions via text, I refer them to the on-site manager for a visit. On my last vacancy, I figure this saved me one good solid workday of chatting with prospectives over the phone.

  3. Dede Christensen

    After renting a luxury furnished rental for the first time, I realized from my first tenants that the wine glasses have to match, the linens must be new- in the plastic shrink wrap OEM packaging, and the floors must be in “eat-off the floor” cleanliness. Oh, and a tv in every bedroom, too. Now I will be dropping the word “luxury” from my ads to filter out tenants with that kind of expectation, whom it is difficult to manage.

  4. Ryan Schroeder

    Mindy,
    Great topic. I’ve learned lots over the years but the most significant is that paying rent is not always a priority for every tenant. Of course good screening takes care of most of that but in the early days if you were a warm body with a few dollars to hand me I thought that was a good start…not true and now I’ll leave an apartment empty looong before renting to the wrong person.

    Another somewhat surprising item for me (still sort of slays me) is that people just don’t take care of stuff. In my home I can paint a room and live with it for 20 years with it still looking good. I repaint apartments probably every 3-4 years on average.

  5. Tim Sabo

    Biggest surprise? Tenants are not responsible for the water and sewer bills they leave behind in Pennsylvania…the property owner is! It is the craziest law, but it is the truth. In PA, municipal law allows tenants-who we all know can take a while to evict-can run up enormous water bills, or never pay a sewer bill, and the property owner-yes, you the landlord-are stuck with it or face having a lien placed on your property.

    Don’t forget to ADD a line item for unpaid water/sewer bills to your budgets!

  6. Walt Gross

    Yes Most municipal authorities in Pa seem like they are run by the mafia.
    Wife,family and I have been flipping properties since 1970. We currently hold 11 single family rentals. When the municipal authorities started this we got stuck with several water and sewage bills.
    In addition when a tenant moves out the authorities now put the bills in the property owners name. They will no longer put the water/sewage in a tenants name. We are now adding a water/sewage charge to the standard security deposits for new tenants in the amount of $250.
    We also add the average monthly charges for water/sewage to their monthly rent. If its a newly purchased property the municipal authorities will give you the previous 3 months to get your average.

  7. Mark F.

    One surprising thing I learned is that lowering rent to attract tenants actually can work against you and make it harder to rent a property. A lower rent often “stigmatizes” a property and makes prospective tenants wonder what is wrong with it. Often they won’t even call because they’ll assume the place is a dump, it’s in a high crime area, etc. If you’re having trouble renting your place and you know you’re rent is competitive, don’t just discount the rent to try and attract a tenant. See if there’s any way you can improve your marketing first.

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