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Sometimes my mind is empty when it comes to my weekly email. And then someone sends something to me that would be a great topic for my audience. The following is a case in point.
We will call the author of the email “Sam.” He, or she, wrote the following:
Dear Rennie –
How can I build a real estate rental business and avoid the downside of being the “evil landlord?” Attached is an article about the exploitation of renters. (Not attached here.)
What do you do as a generous, principled man to address this tension between accruing wealth by charging rent, and wanting to help people?
Thanks “Sam”
And here is my response.
Hi Sam,
If you wanted to help people by providing healthy food, and you opened a grocery store, you would have to sell that food at a profit. If you didn’t make a profit, you couldn’t stay in business, and therefore wouldn’t be around to help people.
The simple answer is that I treat my tenants as though they were customers of a retail or service business. I look at my tenants like I would the lifetime value of clients or customers and take care of them. When they have a plumbing issue, or anything else, it is handled immediately. And if it was their fault, they have to pay for the repair as outlined in our lease agreement. We do have shared responsibilities.
It also starts with the proper screening; I do not accept anyone who completes an application. They must have a steady income, good credit and reserves so they can pay the rent if they are laid off, or we have a pandemic. Plus, they need to be someone with whom I would be willing to share lunch. Wouldn’t people like this be the folks you’d want as clients or customers?
If I was a CPA and ignored my clients or their requests, I would lose them as clients. If I was a retailer and I was rude or dismissive to my customers, they would no longer come to my store and purchase things.
As a result of how I treat my tenants 100% of them paid their rent for April 1, and 100% paid for May 1. And I expect 100% to pay for June 1 even during this pandemic.
My favorite quote is from Warren Buffett regarding billionaires who are jerks. The point is if you are a nice person now, you will still be a nice person if you become a landlord. AND, you still have to create boundaries. There is a difference between being nice and being a pushover.
If you want to know how my tenants feel, go to https://www.valleyvintage.com/testimonials
Hopefully this answers your question.
To Your Prosperity,
Rennie
