For every great tenant, there is one who will try to hustle the landlord
The highs and lows of renting and evicting — to friends, family and foes
When he told me he bought property while he was playing basketball overseas, I thought this was a smart idea. It made me respect him more. It was a sign of stability to not blow money on clothes, cars and other items that would hold no value over time. But I noticed how unhappy he looked when he said it, and I asked, “What am I missing?”
He shook his head and said, “I’m not making any money off that place. I rented it out to relatives.”
I still didn’t get it. A tenant is a tenant. I shrugged and reminded him that relatives can pay rent, too, so I didn’t understand the big deal. The facial expression he shot back at me was like I’d just told him that after we parted ways, I was going to meet Santa Claus at Starbucks. In his words, relatives didn’t feel the need to pay rent or wanted “family discounts.” I winced. I know how that goes. I have family and friends who may as well be ATMs. I’ve listened to stories of “I’m going to pay you back” only for the same people with their hands out to ramble on about vacations or blowing money on other things — never paying back the lender.
My mother always told me, “Never loan out more money than you can afford to lose.” In the few times I’ve asked to borrow money from her, my top priority has and always will be, “Pay her back by any means necessary.” Whether she can “afford” to give it to me is not the issue. “Borrow” does not mean “keep.”
I also took her at her word and very rarely loan out money. Can I afford to? Sometimes. But unlike her and the landlord I was dating, I don’t have the temperament to avoid spazzing out if you don’t pay me back. Never mind my checking account or wallet. I prioritize my own mental health. It’s one of many reasons my mother told me I’d make a great landlord. While I’m the epitome of spontaneity in every avenue, when it comes to business deals, I am a “rules are rules” type. If you “borrow” money from me or we have a business exchange, I’m damn sure getting my end of that deal.
If you’re humoring the idea of being a landlord, ask yourself one question beforehand: Can you handle evicting someone? If your answer is “no,” then I do not advise you to become a landlord. You may be better suited to flip homes: get the money and separate immediately. But a tenant-landlord relationship is probably not your best lane. Although everyone loves a no-drama, lucrative business deal, there is really no absolute way to know that your next tenant is reliable and will pay on time. With citywide (and sometimes statewide) restrictions on evictions due to the coronavirus epidemic, there are quite a few tenants who have become squatters while their landlords are still required to pay mortgage companies.
Imagine someone living in property you own and telling you they’re not going to pay rent, but your mortgage company telling you, “I’m getting paid regardless.” So you’re paying for your tenants housing while your tenant pays you absolutely nothing. Does that sound fair? There are tenants that will absolutely say, “Yes, you don’t need the money. I have _______________ so I cannot afford to pay.” But that same tenant will not take into account that the landlord also has ___________________ and needs money for everyday expenses, too, on top of paying a mortgage.
My views on money are a bit more rigid for a few reasons. My father has worked in banking for almost 40 years. My mother retired as a credit union manager after 35 years. My grandfather did some financial investing after retiring from the post office after 50 years. Stability and financial education is a big deal to them. By default, I paid attention. What would always blow my mind was stories of people who would constantly try to hustle the system. Examples: A credit union member would get approved for a large loan and immediately file for bankruptcy so she didn’t have to pay it back. Or, a relative would get a car co-signed in someone else’s name only to never make any payments since the co-signer was “getting a higher credit score for paying it.”
Or, I’d talk to landlords or condo association members about problematic tenants — the one who claims the bank “canceled their auto-payments” (as if bankers purposely log into someone’s account to make sure that one payment doesn’t go through); the one who mails checks to slow down the cashing process but writes it for a different month so you have to send the check back for corrections; the one who “forgot” to check his/her email and “didn’t know” rent or assessments were due on the exact same date they’re always due; or the one who decides to stop paying altogether because (s)he wants to make home renovations without board approval. I’ve heard a mountain-high amount of excuses. After a while, the lies start smelling like a rodeo.
Life happens. Just as a tenant can fall on tough times, so can a landlord. But before creating a lease with any tenant — whether they share your last name or not — have some ground rules. It is never a good idea to just let someone move in without making sure the lease spells out all of your deal-breakers. The same goes for condo boards; make sure the new owner is well aware of the condo bylaws and Rules and Regulations. While it is much harder to get rid of a condo owner than a tenant, having legal documentation confirming the dos and don’ts ahead of time can avoid a lot of miscommunication later. If the late fees, the assessment rates, the past-due amounts, the pet policy rules, the eviction terms and every other property management policy is written out and signed, then you know where each other stands.
Walking in the tenant’s or landlord’s shoes
Is evicting a stranger as hard as evicting a family member or friend? Probably not. But while evicting your cousin may make that next family reunion cringeworthy as hell, at least the next cousin knows exactly what (s)he is getting into if there’s a free space for rental. Once you set the tone for what you will and will not put up with, and actually follow the legal terms of your housing agreement, others will understand that you mean business.
Even for board members or landlords who don’t like the owners or tenants, it is tough to go through the eviction process. Legal fees are mind-boggling and the record-keeping can be overwhelming, depending on when a collections case is opened versus how far back an owner owes. And whether you like them or not, no one wants to make someone homeless.
More often than not, a property owner was once a renter, so they know what it’s like to walk in a renter’s shoes. Waiving a late fee here or negotiating a payment schedule there is a reasonable and empathetic way to handle someone who is having temporary financial concerns. However, there is a load of difference between someone who really has fallen on hard times and means well versus someone who has gotten over on manipulating and bullying property managers and landlords. Work in real estate long enough, and you’ll quickly figure out who is who.
But what should a property manager (or condo board) do when they don’t want to look like the bad guy when it comes to late rent or assessments, no rent or assessments, or the nonstop hustle of someone who is genuinely set on being a squatter? Count on those same legal documents that were signed the day this person moved in. No matter what your personal feelings are or that of the person who owes, a business agreement is what it is.