Being “Besties” with Tenants

I would quietly sneak up to my tenant’s door and tape a 3-Day-Notices on it at 2am.  Or before they came home from work.  Anything to avoid confrontation.  I don’t like to be around upset people and I certainly don’t like to be the cause of someone’s upset.

Clearly, uncomfortable conversation was not my strength.  Having to confront a tenant over late rent made me miserable.  This is a real detriment for a landlord.  Now that I was abundantly aware that my weakness was costing me money and peace of mind, I knew I had to make some changes.

I had several real estate mentors that ran their own property management companies.  One of them managed over 3000 units in Inglewood.  I remember her telling me to never be friends with tenants and always assume that they are lying.  Because of my aversion to confrontation, I really adhered to her advice.  Sure, they may not be lying, but there was no downside to assuming they were.  If I thought they were always lying, it made me mad.  And it was easier to get tough.

Around this time, I saw a dual-personality develop.  A “split personality” I guess.  But not in a clinical sense.  More like a method-actor playing a role of a much more experienced property manager than me.  And I think it developed out of that conversation with my mentor.  If I didn’t have to be friends with my tenants, it meant they didn’t have to like me.  And if all tenants are lying, then they are sort of insulting me every time they open their mouth.  

This advice gave me the confidence that I needed to conduct face-to-face communication as a landlord.  Instead of the niceties of regular business interaction and thinking that “the customer is always right”, I treated residents as though I were a cop pulling them over for speeding.  I was always professional, but always prepared to issue an ultimatum.

This all evolved as I started having to cope with the stress of dealing with tenants.  It helped me to develop an equanimity that was stable under pressure.  And it gave me some control over my anxiety.

That’s when I realized that I had developed my own method for handling landlord-tenant communication.  A mental model of sorts.

Communication Model # 1: Tenants are liars, never be friendly with them, and reminded thyself that you own said property and have the ultimate power to “pull the plug” if the situation gets out of control (i.e. EVICTION).

As strange as it sounds, this really was mentally reassuring to me.  It became an operating principle when communicating with all tenants.  But to be able to follow through on the threat of eviction, it was important to NOT BE FRIENDS WITH THE TENANT.

Therefore, “Don’t be Friends with Tenants” became my mantra.  

Benefits:  I could confront a situation without being apologetic and without the temptation to “bend” the rules a little for a friend.  In practice, it meant that I could ask for the rent when it was late and not back-down when they gave me an excuse (or lied to me).

Weaknesses:  I experience a higher rate of turnover because I didn’t instill trust and openness.  When there was a genuine need for a little flexibility with the rent, or a simple maintenance request, or an issue with another tenant…all things that can be fixed with a simple phone call, the tenant would often start looking for a different place to live rather than approach me for help.  You only call a police officer if there is an emergency.

I never realized my communication style was costing me until, a few years ago, I started noticing that my best tenants were moving out with minimal notice and very little explanation.  When I asked why, they would usually give me an excuse about wanting to move to a different neighborhood.  Yet, almost all of these tenants left a forwarding address that was only a few blocks away.  

Upon inspection of their units, I found a lot of little maintenance issues that occur over time.  Things like cracked windows, water stains in the ceiling, faded and dilapidated curtains, roaches, etc.  They would have been reasonable things to request maintenance.  But they didn’t.  Instead, it cost me one month vacancy and $2000-5000 to make-ready the unit for the next tenant.

In the corporate world, I have a much different communication model.  I learned years earlier that communicating early and often can turn almost any bad situation around.  A little time up-front can avoid time and money spent fixing mistakes.

So why would managing my tenants be any different?  Why was I treating my tenants like a nuisance when they called?  Why was I so unwilling to check-in with them occasionally to make sure everything was ok?  Why did I assume they were always lying?

The answer is that I was still using a communication model the was optimized for avoiding confrontation; a problem I had 12 years ago and had mostly overcome.  It WAS NOT developed to foster happy tenants or increase net rental income.

I had to develop a new model of tenant communication that allowed me to deal with confrontation while enabling the tenant to have their voice heard.  If the conversation resulted in a maintenance call, great.  At least it didn’t cost me a vacancy 3 months later.  

Along came communication model number 2…

Communication Model # 2: Don’t be the “Bad Guy”, be the “Good Guy”.  Help the tenant get what they want.  If necessary, let the signed lease be the “Bad Guy”.

This was life changing for me!  It completely changed how I FEEL about communicating with tenants.  Something I always hated, communicating with tenants, has become something that I enjoy.  And it’s all because I have removed myself as the “bad guy” and the evil slumlord.  The “bad guy” is the lease they signed when they agreed to be a tenant.  The lease is a legal contract that is binding for both parties.  If your tenant violates the lease, for any reason, you’re answer is that you are simply enforcing the lease.  It’s nothing personal.  If you make an exception, you will be required to do the same for everyone.

Benefits:  I’m not the bad guy anymore.  The energy that would be focused on me, is now redirected to the lease they signed.  It allows me to be a problem solver and a genuine help to my tenants.  I approach the tenant with the intent to make their life a little better by enhancing their living situation.  And if they are late on rent, or they are disturbing other tenants, I can empathize with them as much as I want without feeling disempowered about enforcing the lease.

Weaknesses:  Requires more communication with tenants.  It requires that you abide by the lease as well.  It may result in more service calls, but this is not really a bad thing (pay for it now, or pay for it later).

The end result is that communication with tenants is a lot smoother now and my net operating income is higher without the turn-over.  And sometimes, tenants tell me things that dramatically improves their satisfaction while living in the apartment.  It feels great when that happens.  Who knows, I might even befriend a tenant someday!

What communication models do you use when communicating with tenants?  How has it helped you?