But right now, I’m struggling with the trial and error attempting to build these systems. I’m blogging about my struggles because:
#1 – it helps me think and
#2- I think of it as a public service to my fellow landlord investors. If you read about the mistakes my husband and I have made, maybe we can save you some misery.
A word about misery – people read the stories in my blog, or they hear the tales other landlords tell about tenant problems, and they think it’s just a miserable business. I won’t lie – there is no shortage of misery and drama when you rent houses and apartments to PEOPLE. People as a species are miserable and addicted to drama, it’s simply the human condition. Sorry to be so cynical, but I’ve been a landlord for eight years and I’m up to my armpits in the human condition.
I don’t go out of my way to rent to the Jerry Springer set, either. All of my tenants pass a background check, employment and landlord references, the whole nine yards. It’s just a statistical fact that a certain percentage of them will become candidates for The Jerry Springer Show while they’re renting from me. Usually it’s a job loss that triggers it. I rent to a good, solid couple, both working. Then one loses a job – usually it’s the man – and instead of getting on unemployment and sending out resumes, he spirals into depression. The rent doesn’t get paid, the place doesn’t get cleaned, garbage piles up. Sometimes the woman leaves. Lashing out at the world, the tenant becomes hostile to the landlord, like we caused his misery. It’s very sad. And there’s absolutely no way to predict it.
This used to really bug me. But then I adopted a new philosophy, “It is what it is.”
I am a landlord. Here are my responsibilities:
* providing a living space that meets all local rental codes and passes Section 8 inspection, if applicable.
* making sure all systems are in working order and properly maintaining them – heat, lights, outlets, cold and hot water, toilets, appliances we include in the rent, pipes, windows, doors, and any safety issues involving stairs, walls, ceiling tiles, etc. The only way we can know something on this list needs attention is if the tenant reports it or we find it during an inspection of the unit. One trick bad tenants pull when they get behind on the rent is to not report a maintenance issue and use the maintenance issue as ammunition against the landlord. I am currently building a system to address this, more on that in a future post.
*making sure the place is free of pests. Bugs happen. But the exterminator we hire checks to see what may be causing the bugs. If a tenant is leaving food out on the kitchen counter or allowing garbage to pile up, or is keeping pets without treating them with flea prevention, that tenant will soon be looking for a new place to live unless these issues are corrected.
The following are NOT my responsibilities as a landlord:
*Renovating the unit to suit the whim of the tenant. You moved in and accepted the place as is. Renovations are expensive and must be planned and budgeted for. If you’re a good, long term tenant I may consider that a worthwhile investment. But I am not obligated to. And your timely payment of rent is not conditional upon that.
*Paying your high utility bills. You knew you were responsible for utilities when you signed the lease. Heating costs can be expensive, especially if you have electric heat. We try not to have electric heat in our units, but sometimes it’s the only option. Utility companies have budget plans – sign up. You can get heating assistance through LIHEAP if your income is low enough (I can't, no matter how low my income is because it's not my primary residence.) You can keep your heat at a reasonable temperature, like 70 (here’s a hint, if it’s 85 degrees in your apartment, you have it set too high!) And if you have leaky windows, please report it to maintenance and we will send someone out promptly to seal them up. No, we aren’t required to know they were leaky ahead of time. Once you let us know there’s a problem we will provide a temporary solution, such as weather stripping, and we will put replacing those windows in the budget for the next fiscal year.
*Getting in the middle of drama between you and your neighbor. If one of you is violating a term in the lease, such as making unreasonable noise between the hours of 10pm and 8am, Management will address the issue. But please keep in mind, we can take no court action without solid proof. So please work with us to acquire the proof. Keep a record of the times you hear loud noise, or smell marijuana, or anything else you can’t take a picture of, and we will send a member of our team over to experience the issue ourselves and confront the offender. But God help you if you’re just making it up because you don’t like your neighbor. Eventually it will come time to renew leases, and we’ll have a tough decision to make then, won’t we? I love that in Pennsylvania, you can simply choose not to renew a lease. No reason needed. I’ve only had to use that once in all my eight years, but it came in handy.
Right now, I’m inspired to take the above list of Landlord Responsibilities and Not Responsibilities and type them up for all our current tenants, and give them to new tenants to read and initial before signing their lease. I will need to change the wording to make it a little friendlier, though. But for right now, it’s my blog and I’ll vent if I want to!
Your rentals are a business, and a business needs systems!
My goal for 2016 is to streamline and systemize the rental portion of our business, and run it more like a business. I believe I can do it without losing my humanity or my empathy. I am working with a Property Manager who is also a landlord and a business woman, and she isn’t afraid to get tough with those tenants who would take advantage of my empathetic nature. I genuinely care about people. I empathize with their struggles – I’ve been there myself! I’m sure the good, decent people that I rented to when we were self-managing really appreciated that. But more than a few not-so-good tenants took advantage of my good nature, and each time it hurt like Hell.
And that means I’m going to have to get rid of Liz.
Liz is a Section 8 tenant, and probably the last tenant I rented to personally, before my husband and I decided we needed a Property Manager. Liz is a teenage girl in a middle-aged body. She’s lived in one of my units since December of 2012 with her middle school-aged daughter. Liz has problems “adulting.” She has obvious emotional problems, which makes it hard for her to keep a job. Section 8 pays most of her rent, and we include her utilities as part of the deal with HUD, because she wouldn’t be capable of paying for them herself. Liz is responsible for a small portion of her rent, and she has been late almost every single month since she’s moved in. I feel for Liz, and I have been very protective of her since she moved in. I even picked her daughter up from school once when she got herself in trouble on the playground so Liz wouldn’t have to leave her job. I didn’t want Liz to lose another job. I took a lot of verbal abuse from Liz, chalking it up to her emotional problems. I waived a lot of late fees so she could catch up on her rent. I really wanted to give this woman a hand up.
Then in October, her toilet got clogged, and she blew up my cell phone late one night. We had just signed on with our current Property Manager, so I texted her and she sent a guy over. The next day Liz told me she wanted to get the gas in her name – we have the heat locked on 74, and she says that’s not warm enough, she likes it hot. Like 85 hot. I told her that’s not my call, that’s Section 8. Then she got all verbally abusive – accusing me of threatening to cut off her Section 8 funding. I told her I can’t deal with her anymore, I can’t take her abuse and I no longer have to. Please address all issues with the apartment to the Property Manager.
Then the electric bill started going up.
At first I ignored it. Her Section 8 rent is way above market because the utilities are included, and if I have to absorb the cost of a space heater so be it. I have bigger issues to worry about right now. We’ll address it in the spring. Spring is a much better time to rent an empty unit. Or Section 8 can put the cost of the utilities on her and she can stay. But the last electric bill was $219, and that exceeds the Section 8 subsidy for utilities. Plus the gas bill dropped so low (the heat won’t kick on if the apartment is over 74 degrees) that UGI is asking questions about the meter.
Liz is about to find out there are consequences to her actions. I hope she doesn’t lose her Section 8 housing over this, because she’ll end up in a women’s shelter if she does.
There is a line though, between what is my responsibility and what is hers.
How do you build systems to deal with bullshit like this? Keep reading this blog, and I’ll let you know what works and what doesn’t. Because I’m building these systems!