6 Reasons Nice Guys Make Broke Landlords
Successful property management takes more work than simply buying a house or condo and sticking a “For Rent” sign in the front. Being a landlord takes many skills, from handyman, to ambassador, to collection agent. Unfortunately, would-be landlords often make mistakes that cost them big time in both headaches and cash. Lots of these mistakes stem from operating their business as a nice guy.
Here are six reasons nice guys make broke landlords.
They take applicants at face value.
Landlords who believe they can go with their gut in choosing a renter will often end up paying dearly for that mistake. Failing to perform a tenant background check, review the credit report, and speak to the current landlord can result in renting to someone who is unsafe or won’t pay their rent. Avoid becoming a broke landlord by ordering a thorough criminal history records search, credit report, and reference check. Review every tenant background check to ensure a successful property management process.
They ignore negative information on the applicant.
A property rental best practice is to weigh all the information about a potential renter, and make a decision. Sometimes, landlords will try to be nice by ignoring pieces of information that may be embarrassing to or reflect negatively on the applicant. Beware! Landlords who let a previous eviction slide or disregard bad credit or a shoddy work history can end up with an expensive disaster on their hands. Be consistent. Red flags in the tenant background check that make you not rent to one person should also be a factor in turning down another.
They break the rules for tenants.
Nice guys make broke landlords when they begin bending rules to help tenants out. Allowing a cat when there is strict no-pets policy. Making room for an extra vehicle when the lease says otherwise. These actions seem like no big deal, but they set bad examples. Soon, other renters will push the boundaries, and chaos will ensue.
They become too personally involved in tenants’ lives.
Saying hello during a property inspection is one thing, visiting for poker night and pizza is quite another. Fostering a professionally cordial relationship and communicating effectively with a renter is a property rental best practice, but draw the line. Personal friendships with tenants can go awry fast, leaving the landlord with a lost rent, an empty property, and possibly even a lawsuit.
They rent to friends, family.
It’s tempting to rent to a buddy or cousin who is going through a hard time. Landlords must keep in mind, however, they aren’t running a charity. Renting to a friend or family member sets a landlord up to not only lose rent, but the horribly stressful idea of evicting them. Family poses an especially big issue, as this can permanently damage existing relationships. Aunt Edna will never forgive you for kicking her baby son Joe out on the street. If this situation presents itself, the best best is to assist the friend or family member in finding a residence. But don’t let it be on your property.
They forget it’s business.
The overall goal of a landlord is to make money on their rental property. As we mentioned above, successful property management is achieved when the landlord operates in a professional, businesslike manner. Issues arise when landlords forgo business protocol and forget it’s business. By always running a rental business as you would any other business, you can avoid potential tenant pitfalls that can be costly in time and money.
By ordering a tenant background check, landlords protect themselves from renters who won’t pay or will damage the property. Additionally, while landlords don’t need to be monsters, they must maintain a professional stance when communicating with tenants. Avoiding these six behaviors will minimize your chances of becoming a broke landlord.
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