I recently read an article today titled “Renters Are Shelling Out a Bigger Share of Income For Housing Than Homeowners” which outlined the financial woes of Jane Doe Renter who is spending a huge chunk of her income versus Mr. Homeowner whose mortgage costs are actaully decreasing. Much of this article’s intel seems to be at odds with what I see in the real world, as I know plenty of homeowners who mortgages are taking a big chunk out of their incomes. Hey, life happens and the numbers that won you that bank loan may not be the same five to ten years later. But what got my feathers ruffled was the implied tone which once again pits the “poor and disadvantaged” renter against the “fat cat” homeowner, a seemingly common theme in our society. To be fair, the author did state later in the article that the individual’s daily wage wasn’t keeping up with the increasing living costs but the damage was already done in the court of public perception. Bottom line, the homeowners are taking it easy while the renters are struggling. And for the landlord, the perception is even worse. It’s funny how society doesn’t take into account the responsibility and accountabilty of every homeowner. What it takes to get one’s finances in order, to save up money for a downpayment, delaying gratification to realize the dream of homeownership over a vacation or new car. And being handed the keys is just the beginning. Maintenance, homeowners’ insurance, not to mention unforseen problems like a pipe bursting. And if you’re a landlord, Pandora’s Box is about to reguritat. Adopted tenants (a mistake I hope SPLs never makes!), unit turnover, the dreaded water bill… Yet the homeowner tackles it all on with grit and determination to breath life into their hopes and dreams. But no one applauds the homeowner for such, everything is only seen through the lens of the renter.
I agree with the author, today’s wage is the culprit. But there is another villian that needs to exposed and dealt with. The sense of entitlement of renters. I believe every human being has a right to housing but not to location. Many of us would love to buy off the rack on Rodeo Drive, but our money decides whether we shop Walmart, Macy’s or even the exclusive boutiques on Newbury Street within Boston’s pricey Back Bay neighborhood. Each retailer offers good quality apparel for certain price points and soceity accepts this reality no questions asked. There is no legislature demanding Barney’s New York to sell their merchandise so all can afford them despite clothing being a necessity like food and shelter. But legislature is coming down the pipe like a roaring train to control rents in many cities and it will be the single property landlord, the one without the deep pockets who will get shafted.
The title landlord is usally synonymous with words like slumlord and greedy leaving many single property landlords (SPLs) feeling pressured to prove they are anything but. However, the reality is WE are needed and an important part of the residential process when it comes to housing, especially in states like Massachusetts where multifamily properties make up a huge percentage of residential homes. But this isn’t about boasting or needing anyone to grovel at our feet. Instead, I am reflecting on the blessing that a mulitfamily is and what it says about those of us brave enough to take on tenants, building maintenance and housing laws all while paying a mortgage and living our own lives. It’s no easy feat to do what we do and still live to tell the story. Why? Because we’re not just managers of a building, we’re also indirectly counselors, social workers and even teachers. Tenants enter our properties with extreme experiences and some none at all and we as landlords embrace it all. From the young single mother who has no clue who to contact for her heating bill to the parent fearful of being evicted due to financial woes to the older tenant on a fixed income with medical concerns. All this and more is laid at the feet of the single property landlord. And we absorb and manage it all while trying to balance the huamnity before us and the fiscal demands of staying afloat. That is the courageous beauty of being an SPL. A beauty that speaks of our grace, patience, dedication and determination. A beauty I am thankful for.
On Tuesday, August 22, the City of Boston will be holding a Fair Housing Public Hearing for all residents. It gives tenants and landlords an opportunity to raise their voice regarding the issues and problems they see and want changed or at least addressed. I’m sure I will see and hear many tenants give their perspective of housing issues which is their constitutional right to do so. However, what I have yet to see at such events is a swarm of Single Property Landlords fighting for fair rules to govern fair housing. Many times SPL’s are ignorantly on the side of the tenant, advocating for them much to my chagrin and outrage. Don’t get me wrong, I am not against tenants but I am for SPLs knowing truth and having the courage to stand for that truth. We have constitutional rights too. The bottom line is that Fair Housing only benefits the tenant but that can be changed IF all owners (Single Property Landlords and Real Estate Investors of mulitple properties) stood together. The laws are ever changing and it’s each SPLs job to keep up. What was legal yesterday is illegal today. How do you get around the question, “How many people will be occupying the unit?” if it’s deemed discriminatory? How do you deal with tenants smoking weed now that it’s “legal”? The definition of disability is enlarging – what does that mean for the SPL? Don’t rely on an outdated handbook given to you by HUD or the city, come and learn and raise your own concerns. Let the city know you matter and that they have a responsibility to you as well. This is not the time to let someone else do your fighting for you. Many of the Democratic Party made that same mistake on election day and you see where it got them. I’ll gladly give up a few hours of my time, tussle with 5:00pm traffic to make my voice heard and stand up for my rights as a property owner…will you? See you there!
Fair Housing Public Hearing, 700 Boylston Street (BPL) 6-8pm
Many of us will never know what it took to fight against the war chest of Queen and country, to extract and maintain the freedoms we enjoy today. We will never know the pain of watching battleships swarm around our land and professional soldiers assissinate our families, haul off our livestock and burn our homesteads to the ground. But today we do know the joys of the freedoms and choices we are able to make because of The Reveloutionary War. A vehicle that cemented our freedom so well, it rang all around the world drawing the down trodden and huddled masses to our shores.
Independence Day is so much more than celebrating the defeat of monarchy rule. It is the celebration of the freedom of the individual to become, do and be. To create opportunity and seize it, something YOU the single property landlord did when you decided to buy a house…and that should celebrated! You have planted a seed and are watching it grow while cultivating it, pulling out weeds and making sure it gets enough water and sunshine for 10 years, 20 or even 30 years. You are determined to have a full grown oak tree with deep roots for future generations to enjoy and learn from. But with real estate booming in certain cities and the local resident’s squall of rising rent rates, that oak tree you’ve dreamed of growing is now being threatened. It boggles my mind how landlords can stand with certain legislature that will ultimately do them in. Landlords who allow their emotions to lead them and listen to pro-tenant initatives inform them of one-sided scenarios. Landlords who don’t see that the seed they’ve planted is slowly being uprooted and they are holding the hoe! We have to unite because too many of us are not informed and are being led down paths to our destruction. A destruction we may not see today or even in our time but it will reverberate in our childrens’ time. The early settlers seemed to be no match for the regimented military of England but what won this nation’s independence was the collective individuals’ raw thirst and hunger for freedom. A freedom they didn’t take for granted or even dream about for themselves. They did it to initiate a standard for the future. If we’re going to win this war of managing our properties without governement interference, then we must unite. In the state of Massachusetts alone, there are countless SPL’s running and managing their own multifamily properties. Think what a mighty fist we could be, how we could help each other, fight for one another, make enroads for each other, learn and win with each other. We would be a mountain pro-tenant organizations and their politicians couldn’t move. So as you’re chowing down on that hamburger, waving the flag or watching the fireworks think about how well you truly are independent as an SPL. And if you’re not, it’s time to join the ranks.
Just Cause Eviction. What do you know about it? What do you think of it? How will it effect you as a property owner and landlord? Are you relying on an organiztion’s definition to rally you onto their side? Do you know all the ins and outs of this issue? Or are you letting your emotions be your compass and allowing empathy for the “poor, taken advantaged of” tenant tell you how to think on behalf of your business (remember, our properties are not our homes but businesses)? Ever notice how the examples employed by the opposition is always an elderly person being pushed out of their apartment of 30 years? What about the tenant who brought in five other people not on the lease and destroyed the unit? But I digress…
I’m not an expert on Just Cause Eviction…yet. But I have taken the initiative to learn about it and how it would effect me as a SPL. From aligning myself with associations to attending hearings in City Hall, I’m learning more and more that Just Cause Eviction is a diaster waiting to happen…to landlords. If you’re afraid to go to court now over your tenant’s illegal actions and behavior, imagine what the process will be should Just Cause Eviction pass. Again, I’m not an expert and want to understand it thoroughly before I pass what I know on to you. But don’t wait for me, learn about it yourself. But I caution you against becoming taken with the images and stories of “grandma being evicted” the Just Cause Eviction supporters will endorse. Remember, you have a business that you’re paying a mortgage on and maintaning ALL BY YOURSELF. No one should have the right to hold your unit hostage just because they don’t want to leave living in the city. Keep your chin up….I’ll be back.
I recently spoke with a client and friend of mine about a tenant that she needed to evict only after one month of tenancy. It seems the tenant didn’t really have the best history but her mother pulled on the heartstrings of my friend and now she has the tenant from hell. Even the other tenants were complaining about her, from loud music, smoking and violating other building rules, you name it this tenant was guilty. What happens to us as humans that even though we have irrefutable evidence, we allow our emotions to lead us away from sane and responsible decisions? And we’re all guilty of this faux pas. Ditching the gym, avoiding a household chore, delaying a work project, not returning important calls. And depending on what we’re turning a blind eye to, the consequences to our well being may vary. If I eat a slice of the office birthday cake, I risk feeling guilty for not making healthier choices. If I willingly enter into a lease agreement with a known chaotic tenant, I risk so much more than my sanity. But emotional decision making is one of the greatest common denominators I see in SPLs. Whether feeling guilty or trying to be nice, SPLs are always lowering themselves into ditches that can take months to years to get out of. I made one emotional decision as a landlord and it was enough hell to burn into my brain a searing reminder to never do it again. I was at a financial weak point and needed a tenant badly. I did my due diligence and researched as best I could the applicant’s background. Although no red flags popped up, instead of taking my time to get acquainted with the application information, I was rushed head first to occupy an empty unit. This tenant ended up being a nightmare I couldn’t seemingly get rid of. The lease I discovered was useless when it came to her rights on certain things. I was left in the dark and had to accept it while holding my breath waiting for the lease to expire. This tenant nick picked over any and everything which left me running around like a headless chicken. And the ONLY way I was able to expel her from my building was due to my anal retentive documenting that she could not legally contest. Talk about a lesson learned, the hard way! I now refuse to let external circumstances, no matter how dire to move me to make an unfounded decision. I know we all want 100% occupancy but nothing is worth our sanity. I have found that having high standards not only ensures my sanity but leads to higher and longer term occupancy rates than not. It also helps to weed out those who aren’t looking to abide by the rules. So leave your emotions by the door when it comes to running your business (yes, it’s a business people!), especially when it comes to friends and family. I never rent to those two groups, the headaches and liberties they take aren’t worth your sanity and it compromises your ability to be the CEO when needed.
Getting back to my client’s situation, I told her to document everything, even the warnings she has given the tenant and to move on evicting her as there is proof of lease violations. As SPLs, we’re not the big real estate companies with 10,000 or more units. Our multifamily buildings are our homes where we interact with our tenants and see them on almost a daily basis. It’s the place where we raise our children, rest after work, host family dinners and have birthday parties. And because those important things happen in our home, we deserve to see it as a place we want to be not a place we have to tolerate due to unruly tenants. But the peace we deserve can never come forth from emotional thinking. So put your emotions to the side and be the CEO of your sanity.
It’s been a long nearly ten months and first and foremost, I must apologize for not being present and seemingly dropping off the face of the earth. I hadn’t forgotten this blog, I just realized two posts in that in order to really be a bastion of information one can readily use, I would need more than just my own rage. So I hit the pause button and went off in search of much needed learning and education. But to my dismay, Massachusetts only likes to share its toys with tenants, allowing landlords on the playground only if they accept the squalor of information measured out by the state and its conspiring agencies. Not giving in, I kept prodding and managed to find a light shining off in the far distance within this dark long tunnel. There are allies among us! But the quest to find these gems must be ours and I have found them in the HUD office and different associations that rally landlords together. No honeymooning here though, I totally understand I must dig beyond the surface of Landlording 101 to get to the gristle, bone and marrow that will allow us to arm ourselves. That being said, I attended a workshop a few months ago on the laws governing the landlord and tenant legal relationship. It was informative but skimmed the surface leaving eager landlords unknowingly in the dark (was that the plan all along??). I left the workshop with more clarity on certain issues but was stunned by the gaps and holes in the information disseminated. I am not an attorney but experience has driven me to an attorney or two and the intel I received just didn’t match some of what the workshop was presenting. I understand these presenters cannot officially give legal advice but can only merely lay out basic facts within the limited timeframe of the workshop. However, many landlords never take the initiative to know more unless faced with housing court. This workshop and all the others I will attend will always cement one thing in me: ARM YOURSELF. I have to be my own advocate for my business because I am the CEO of my multi family property and the buck ends solely with me. That is why I strive to know and educate myself and pass it on to you. My first must-do advice to my fellow SPLs…get involved. Join a landlord group or association. Why? Because such groups have experienced and even professional forerunners who keep their fingers on the pulse of city and state actions that may affect you negatively. Because connecting with like minded others opens you to support, new ideas and knowhow you may not have been aware of. These associations do not cater to the success of the big whigs with thousands of units across the city but to all property owners whether of the one unit condo, two family home or apartment building. Regardless of what you own, we are all affected and sooner or later all actions will trickle down to you, the single property landlord (SPL). Take the time to investigate groups in your area and attend a meeting. I’ve recently joined one and will happily share what I’ve learned. But nothing beats knowing for yourself. Take the Just Cause Eviction issue, for example. I recently listened to a SPL rally for it because to her, it was a legal action against the big whig greedy property owners looking to dump their long standing poor tenants in favor of six figure occupants who could pay the higher prices. But her perception was wrong as I learned in a property owner association meeting. If approved, Just Cause Eviction will affect us ALL negatively. But I’ll dish on that in a later post. For now, arm yourself and get involved.
Why am I a desperate landlord? Because since buying a multi family home, I strived to be an effective landlord but often found myself ill equipped in a state that coddled tenants while giving landlords swift kicks. I quickly discovered that landlords were the underdogs running in place. A tenant complains and massive support is given, a landlord complains and they have to meet a compelling burden of proof. No, I’m not whining. I willingly signed up to be a landlord but after being in the game for a while, I totally understand why many throw in the towel. And throughout my years of being a landlord, I kept meeting other landlords who were really naive or at the end of their rope. Either way it wasn’t working for them.
My parents owned a multi family property and we lived in one of the units, so I grew up watching them deal with the nuances that came with managing tenants. When I decided buy a house, I knew it would be a multi-family, so I set out to learn all I could about property ownership and amassed a great deal regarding effective tenant management. My parents modeled for me the importance of compassion and understanding that tenants are real people whom life can happen to. But I have also learned from successful real estate investors that my multifamily house isn’t a home, it’s a business. And I keep that truth always within my peripheral vision as I sit at the helm of property ownership. This truth impacts my vision and chases away emotional decisions. Nope, I haven’t made all the right choices but what I’ve learned has kept me from falling into ditches too deep to dig out of. And it’s those choices and lessons I aim to share with you. For me this isn’t a blog but a living document that can only evolve with your thoughts, war stories and personal experiences. And ultimately learning to be a more informed and effective landlord where your multifamily is no longer a detriment but a joy.
So you drank the Kool-aid, you bought the Utopian stories of how wonderful it would be to have someone else pay your mortgage while you get to keep your paycheck to yourself. There you are at the closing all smiles, reflecting the ones smiling back at you from the attorneys, real estate agent and even the seller. However, they know you’re screwed. They know you’re an innocent duckling about to be thrown into the lion’s pit with a raw, bleeding pork chop around your neck. You’ve finally signed for the umpteenth time on the dotted line and now you’re a happy new homeowner filled with naive hopes about the new life awaiting you. You are ready and eager to co-exist with others who you believe will respect your property, pay the rent on time, be mindful of their neighbors and take care of your unit. But you didn’t know behind that smile was a future tenant who knew the law better than you did. You didn’t fathom that your lease was full of holes and blind assumptions that would eventually be your Achilles’ heel, but they did. Be nice and respectable? What does that really mean? You didn’t know that you’d be paying through the nose to repair the unit for damages they caused but you have no way of proving. You didn’t know that eviction wouldn’t be the answer to your prayers….your blessed remedy for a fresh start or so you thought. You didn’t know that “the others”, your precious tenants would turn the eviction into a dragged out free tenancy that would leave you broken, disenchanted and disgusted. But that’s your biggest problem isn’t it? You didn’t really know the law, your rights, or your tenant’s responsibilities. And before you resign to live in an untenanted home and throw away all the benefits of having tenants. Before you throw up your hands and allow all your relatives to occupy priceless square footage for a penance, resolve to learn, to understand and to know. Case in point, did you know that companies who charge a bundle to do background checks can only tell you half the story about a tenant’s true rental history? How can that be? Stay connected and I’ll tell you how…