Tenants as Friends?
Save Yourself Stress – Keep Your Tenants at Arm’s Length
There’s a well known warning about mixing money with friends, especially when it comes to business arrangements. The same can be said for the tenancy relationship. While things run much smoother if you get on with the people who are paying you rent money, get too close and it can open you up to all sorts of problems.
There are several good reasons for not getting too close to your tenants, here are my top three:
1. There is a perception that all landlords are rich
I had a client recently whose property manager visited a tenant who was three weeks behind on the rent. The tenant couldn’t fathom why the landlord couldn’t cover the rent for a couple of weeks, especially since the tenant had two small children. If a tenant is particularly close to their landlord, it’s easier for them to think they’d be more willing to do that. It can also make you feel like you should be “cutting them some slack” because of your friendship.
2. Some tenants know how to milk the system
The Residential Tenancies Act 1986 was put together to protect tenants from unscrupulous landlords. It’s great that an increasing number of people are becoming aware of their rights, but as always, there is a minority who take advantage of them to get away with bad habits. No matter how trustworthy or friendly your tenant may seem, don’t be tempted to forgo doing things by the book. Those rules are there to protect both parties, and genuine tenants will be glad that you want to keep that part of the relationship professional.
3. Some tenants prey on a landlord’s generosity
One of my clients was dealing with a tenant who moved family members into the house after a funeral. They stayed for three weeks and then the father moved in to look after the tenant, all without asking the landlord’s permission. Not wanting to intrude on the grief, my client let it go. By the time she came to me she was angry, but reluctant to evict her tenant because she didn’t want to deal with the guilt associated with it. It is possible to deal with such a situation in a firm but fair manner, but much harder to do so if you’re close to your tenants.
One way to avoid getting involved is to pass the management over to a specialised property management company. There are plenty of good companies out there that know when compassion is appropriate but won’t let you get taken for a ride.
If, however, you decide to do it yourself, a relationship that is built on trust and respect will serve you well to avoid any future problems. It means you’re more likely to be able to sort any potential problems amicably, with a compromise that both parties are happy with. But never forget that it is a business relationship and you need to treat it as such, so, if it’s not working for you, make a financial business decision rather than one based on emotion.