This is THE Landlording Class? Really?

Last week I completed the second class of a two-part series for first time homeowners.  I wasn’t looking to buy but was interested in finding out what preparation and training was given to those looking to purchase multifamily homes and ultimately, landlording. Sadly, I had to wait until the last class AND the second to last hour before that topic would be broached. It was an interesting one and half to two hour presentation by an attorney on the legal do’s and don’ts of renting to tenants.  We received a nice folder which included a sample lease and some touched upon topics that would be relevant to one looking to rent to tenants.  Overall, it was a good and broad presentation for those interested in venturing into the land of landlording.

But let’s back up for a moment.

One day in January, I called the Home Center in City Hall and asked if they conducted or knew of any classes that taught on how to be a landlord. They directed me to MAHA with a confident tone regarding the learning one would receive.  I followed their advice and signed up for the two class session.

Going in with an expectation of being thoroughly educated, I was sorely disappointed.

Now I will admit, there are somethings you’re only going to learn by experience.  No class can prepare you for all that being a landlord can throw at you.  And quite frankly, people don’t really take things seriously until they’re in the thick of it, which for many unfortunately, ends up being in front of a judge.  But what made me exasperate a bit too much while listening to the presentation was how different the law is from it’s interpretation and practical application.  The attorney didn’t give out erroneous information but from my years of experience, the law is more ideal than reality.  For example, a landlord has the right, with proper notice of course, to enter into a tenant’s unit to inspect the premises or make repairs.  Simple right? I, the landlord gives you, the tenant a service notice to come into your unit to re-screw a cabinet door that seems to be semi-hanging off the hinges. But here’s where it gets sticky.  You as the tenant can deicide that you don’t want me in the unit PERIOD.  And the reasons are irrelevant. I can be the nicest landlord in the world, have committed no infraction of the lease or against you but you can decide that you just don’t want me in there. And guess what?  The judge will side with you, the tenant.  Which means I will have to shelve out $100 per hour to have a LICENSED contractor come and screw in something that will take him less than 10 minutes to do.  He’ll make $100 for about five minutes of work.  Yeah….let that reality sink in. Your cash flow for that month just went down $100.  But in the world of landlord-tenant law which is another phrase for ideals and should-be’s, you are not given not the whole story. Just the kumbaya picture of happy tenants and a responsible landlord (wow, that sentence deserves a post of its own). How do I know the above example is true?  Because I went through it.  I stood there shocked as the judge basically informed me that the maintenance agreement I had written in the LEGAL lease was basically worthless.  I was powerless and had no choice but to fork over unnecessary dollars for meager tasks.

This is what these workshops aren’t going to be able to teach you.  And in all honesty, given the numerous other things these classes have to cover from insurance to credit scores, landlord lessons are collateral damage in the enormous scope of homeownership.  So what’s a new landlord going to do? They are going to fail.  They are going to end up in housing court. They are going to become disgusted with even having tenants. They are going to let their families occupy the units or leave them empty. OR they’ll settle for a tenant that doesn’t allow them to maximize their profits .  Why?  Because they don’t know and there is no one to teach them.

This is why I feel so good when coaching landlords. I empower them by giving clarity to the law, what it looks like in a realistic setting, and how to troubleshoot when surprises happen. Many are just afraid (who wouldn’t be in this pro-tenant state?) and are willing to placate and do anything to avoid problems. But that’s not a sound business practice. This defeatist mentality benefits neither the landlord or the tenant.

Overall, I applaud MAHA for giving their participants a broad picture of what being a landlord means.  But it’s not enough.  I hope to work with them to catch those first time homeowner buyers looking to be a landlord.  And if I can catch them before they buy and give them the tools that have successfully served me, we can eradicate the fear and change the bad rep that still darkens the streets of our city and maybe lighten the load at the housing court on Thursdays.

Celebrating Independence demands Interdependence

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.

Time to wake up and smell….the truth

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.

Emotions: The SPL’s Nemesis

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.

And She’s Back….

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.

 

 

Me, Desperate?

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.

The Others

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…