One of the most effective things a landlord or property manager can do in order to keep their business operating profitably is to learn to say no. Most have stories of tenant shenanigans that taught them some tough (and often expensive) lessons, and they understand that the choices they make when problems with tenants arise can impact their profits and property value.Bottom line, renting apartments and homes to tenants is a business. The business of being a landlord, unlike most other businesses where there is a one-time exchange of goods and services and engaging in further transactions is optional, landlord-tenant transactions typically last a year or more.
With each party tied to the other over a long period of time, it can be very difficult to end the tenancy if the situation starts to deteriorate.
Cultivating the ability and discipline to say no is key to successful landlording.
Landlords and property managers develop working relationships with their long-term customers (tenants), which makes for a delicate balance when problems occur. There’s a human element that contributes significantly to this balancing act—between the landlord’s need to meet his or her financial objectives and coping with tenants who are struggling.
Tips for saying no effectively
Always refuse a tenant request calmly, politely, and clearly, without negativity.
Keep the focus on the request. This will help convey that you are rejecting the request, not the tenant, This is strictly a business decision, nothing personal.
Provide a clear explanation about why you denied the tenant’s request so that he or she realizes the decision is not open or negotiation. This helps the tenant accept and come to terms with your decision. “no.”
Keep your voice firm and make eye contact so that your body language shows you are to be taken seriously.
It is not personal. A lot of ill will can arise when the line between the landlord as a person and the landlord as a business is blurred. When you handle tenancy issues make sure you are acting for your business not for your person. By de-personalizing the way you communicate with your tenants, especially during tense situations, you can better focus on the matter at hand while you deal with the issues in a professional manner.
Landlords and property managers who succeed are the ones who have learned to be firm and say no--almost without exception.
What constitutes a nice landlord?
They take applicants at face value.
They ignore negative information on the applicant.
They break the rules for tenants.
They become too personally involved in tenants’ lives.
They rent to friends, family.
They forget it’s business.
No more Mister Nice guy
Nice guys make broke landlords.
That’s not to say landlords and property managers aren’t nice guys, they’re just as amiable as anyone in business. But considering the unique demands of landlord-tenant relationships, and the need for property owners to ensure their cash flow is consistent to keep the business viable, those with an intrinsic need to be liked and lacking the discipline to enforce the terms of every tenant’s lease agreement, even under the most difficult circumstances, should hire a property management team or they will fail. Nice guys make broke landlords.
It’s not that landlords and property managers should stop being genial and helpful to their tenants, but property management best practices prescribe the boundaries that property managers need to identify and heed; or risk emboldening renters to take advantage. Tenants often detect vulnerability in a landlord’s sympathetic and accommodating nature and try to exploit it; maintaining business hangs in the balance.
In 2017, ⅔ of the nation’s 3.8 million rental property owners failed to make a profit.
Tenants and landlords have different responsibilities to each other. Being a successful landlord or property manager is about behaving professionally under any circumstances, and consistently showing tenants respect, which can come across as “nice”.
Tenants may ask for extra time to pay their rent or to have a friend or family member stay beyond the specified time allowed for guests or another respite during a difficult time. If they’re responsible tenants with a track record for paying their rent on time, saying yes can help foster positive relationship among your tenants.
But more often, tenants will request rent payment extensions for less than legitimate reasons (i.e.: one landlord reported that a tenant asked him for an extension on her rent payment until her boyfriend got out of jail. His answer? No!
Or they ask for approval to make home improvements that go beyond hanging new drapes (i.e. one landlord reported that unbeknownst to him, a couple of tenants renting his three-story triplex set up a makeshift patio with chairs and a table on the second-floor flat roof, which they accessed through a window, damaging the rubber roof system by walking around and dragging furniture onto it, presumably through the window also. They called the landlord to ask if he’d install a door leading out to the roof so they could create a garden seating area. The roof was constructed only to function as a roof. His answer? No!
Or, they get caught housing a dog in their apartment, located in a no-pets apartment building. (i,e, one landlord reported that other tenants reported hearing the dog cry while the tenants were at work during the day, and at night when they were home, By the time the landlord became aware of little Rex, they’d all grown attached and pleaded for an exception to the no pets rule. Her answer? No!
Knowing when to be accommodating and when to put your foot down is key to maintaining profitability and satisfied tenants.
Here are a few examples of situations in which landlords and property managers should stand firm amid tenants’ sob stories and over-reaching requests that call for an unequivocal “No” and not come out feeling like “bad guy”.
Problem: Late rent payments
Perhaps the most challenging tenant request is for an extension on the rent payment. Denying someone who appears to be struggling an extended grace period can be extremely difficult but except in very rare situations, landlords and property managers must apply lease agreement terms unilaterally and say no. Long-term tenants who have historically paid their rent on time could be granted an extension at the landlord’s discretion. Tenants who pay late by a few days should always be responsible to pay a late fee.
A late rental payment can negatively impact your cash flow. Provided the rental laws in your state do not state otherwise, always enforce the late fee defined in the tenant’s lease agreement, without exception. Once a tenant believes he or she can pay late with impunity, they’re apt to make it a habit.
Landlords and property managers who know how to stand firm in circumstances that can get highly emotional and even aggressive aren’t the bad guys, They’re the ones who know that their obligation is to the business and ensuring its profitability. When tenants fall behind enough on their rent to warrant eviction, regardless of how much they ask or more time, the landlord or property manager doesn’t have the option to reverse a decision. Although it feels personal, it isn’t. These are simply the unpleasant realities of the rental housing business. No one is exempt.
Problem: Tenants Decorating
Most people look for rentals that allow tenants to make some decor changes that appeal to their taste and aesthetic predilection. However, landlords have countless horror stories about renters who go beyond the scope of their lease agreements and make changes to their apartments that can undermine the property’s value and the landlord’s ability to re-rent the space without costly and time-consuming repairs, Scheduling apartment inspections once or twice a year may deter tenants from attempting unapproved improvement projects, or happen upon a DIY bathroom remodel in the making.
Whether or not you’ve dealt with such a scenario already, make sure to review the rules involving the scope of decorating tenants may execute at the lease signing, and make it clear that permanent changes are not allowed.
Banning tenants from making permanent changes doesn’t impede their ability to decorate the space and make it their own. There is an abundance of renter-friendly, damage-free decor and storage solutions on the market that can give tenants all the design options they want or need that don’t require hardware or mar walls.
If you don’t relish the idea of restoring black or lipstick red walls to white or a light color after a tenant moves out, require that paint colors are approved by the landlord or project manager before it goes up on the walls.
Problem: Denying a Tenant Request
Dan is a landlord who finds himself fielding calls and emails from tenants about noise, parking problems and other lease violations caused by a habitual guest of one of his tenants named Matt. It appears that Matt’s girlfriend has been spending most days and nights at Matt’s apartment. Matt’s girlfriend generates a Leonard Smalls "Lone Biker of the Apocalypse" quality day and night, creating a steady stream of complaints from other tenants and a growing stack of lease agreement violations from Dan,
When Dan meets with Matt to discuss the girlfriend and the lease agreement violations as they pertain to tenant guests, Matt asks if his girlfriend can be added to the lease and move in. While Matt has been a good tenant for several years, Dan has already decided the girlfriend has proven herself to be nothing but trouble and denied Matt’s request.
He also reminds Matt that he is responsible for the actions of his guests on the property. Dan respectfully but firmly tells Matt that if he is unable to resolve the issues brought about by his girlfriend’s behavior, Matt would be evicted due to the lease violations. When Matt objected, Dan showed him the section of the lease agreement pertaining to guests and violations and warned Matt that one more complaint would result in a 30-day notice to quit for lease violations.
The next time Matt’s girlfriend visited the apartment, she violated the lease agreement again, angering tenants who notified Dan, who in turn delivered the 30-day notice to Matt the next day. Dan received a desperate phone call from Matt begging him to reconsider, but Dan refused and stuck to the timeline as outlined in the notice. When Matt moved out, other tenants expressed their appreciation for Dan’s handling of the situation. Dan’s unwillingness to back down on the decision to evict Matt, despite Matt’s pleas, registered with tenants as well. By dealing firmly and decisively with one problematic tenant, he sent a message to the entire community that his decisions are non-negotiable.
Successful landlords develop excellent customer service skills and learn to be effective business managers. As a landlord or property manager, you are responsible for making some tough but necessary decisions to safeguard your business’s growth potential.
RentVest Property Management offers customer-centric property management services to property owners in Atlanta, Dallas, Denver, Hawaii, Houston, Las Vegas, Phoenix, Portland, Tucson, Reno, San Antonio, and Vancouver. To learn more about our full-service property management benefits, visit the RentVest Property management website.