API recently received the following letter from a reader named Chris, who is also a homeowner and former tenant. We think he’s got some good insight into the relationship between tenants and landlords… tell us what you think.
Dear API,
Thanks for raising the issue of ‘dodgy landlords’ and ‘dodgy property managers’. You always seem to hear the stories about ‘tenants from hell’, but you very rarely hear about the other side of the coin.
I’m a homeowner (two years now) and used to be a tenant for about five years.
Being a migrant here, I was extra careful to make sure that I kept the place clean and tidy because if you don’t get your lease renewed, that can cause problems with your visa (if you have nowhere to live and considering that I have no family here, you can’t just go to mum and dad’s house). I now have my own home and I feel so much more secure than I used to. I also only have to answer to myself to pay the mortgage and keep the place clean.
I was fortunate in that I had two really good landlords, but it was always a worry as to whether or not your annual lease would get renewed, less so what the price was. It was the hassle of having to go and find another place if eventually (in one case), the property was sold.
I think that both landlords and tenants should realise that it’s not an ‘us versus them’ game on either side. We both need each other – one to provide a roof over their head, the other to actually fund the landlord to be able to provide that. Very few landlords would build a house without a loan, let alone build it for the sole purpose of not putting anyone in there (the exception being some mainland Chinese buyers who keep a house brand new with the purpose of selling it).
Tenants, most landlords are not millionaires who drive past your (their) house in a BMW, gloating and saying “SUCKERS!” whilst laughing evilly and thinking about going home to count their money. Most are the kind of people you meet next door, who just want to do a bit better in life.
Landlords, it’s not a ‘feudal system’, where you had slaves who were ever so grateful to have shelter, but some act like it is. Do you really think that tenants need you personally, more than someone else? They can always leave… and remember the story of the Golden Goose.
Some property managers throw their weight about and take a sick glee of threatening to put someone on the tenant’s blacklist for very minor things or the fact that they ‘have the right to choose who they let the property to’. I’ve had some realtors treat me (a professional person) like dirt or give me the run around merely because I was a tenant, being shown leases that had already been signed up for – in one case the tenants were already there sitting on the sofa! – and wasting my time. It’s a very sad situation when people (tenants) are labelled as ‘scum’ on internet forums or blogs, but they are.
The bottom line is this: your tenants are not ‘scum’ and are actually a very critical part to your business, just like ‘employees’ are.
Real estate agents don’t seem to realise that tenants often become buyers (investors or owners) and will remember the agents who treated them like dirt, especially when it comes time to sell the property. I do, and I don’t trust some people in Adelaide. In fact, I refuse to do business with them full stop.
Having a tenant in a house is not a right; it’s a privilege that you’re even making any money off the asset.
Having a nice house to live in as a tenant is not a right; it’s a privilege that someone has gone and got off their butt, took a risk and took on a big mountain of debt to try and get ahead in life.
Having a listing to look after is not a right, because you work for me, the landlord, and that job can be given to someone else very easily.
Yes, sometimes it is a renters market, sometimes it is a landlords market, depending on the vacancy rate – but this always has and always will be the case.
But since the market has been flat, most of the sensationalist stories produced by a certain Australian news website have eased off considerably. Some of the comments that used to appear on the ‘comments’ section of the property stories were so nasty and spiteful to each other, along the lines of “you’re paying my mortgage off, suckers”, “I’ll come around and kick you out onto the street”, “I just jacked their rent up 20 per cent because I could”, “when something goes wrong with the property, I just call and they have to fix it NOW or I’ll go to the tribunal”. Whether any of this is true or not is anyone’s guess because some of it strikes me as being ‘big-noting’, but my overarching sentiment is that overall, both sides should drop the nastiness – that we both need each other, whether we like it or not.
I don’t see why it can’t be a symbiotic, harmonious relationship – you pay your rent and keep the place clean, I give you shelter. You want to stay here, I won’t gouge you for it because an empty house produces no income (as people in Melbourne’s west are finding out right now), and also, an empty house gets broken into and stripped of fixings (like in parts of Detroit in the US) or squatted in.
We all need each other to get what we want.
Yours Sincerely,
Chris.
Tell us what you think about the tenant versus landlord relationship. Do you agree with Chris?
An excellent letter – well worded and full of excellent points. Well done Chris. We can all learn from your experience. Thank you for sharing.
Comment by Catherine Cashmore — January 25, 2012 @ 11:32 am
Thanks for your comments Chris. I agree with you that good tenants and good landlords need each other and I suggest that you would have been a valued tenant. I am somewhat surprised at the negative attitude you have experienced. Unfortunately the real estate industry is represented by non-perfect people, and I’m disappointed you have had to deal with them. I wish you’d been my tenant. I’d also like to make the point that between a tenant and landlord there are real estate people and, specifically, sales representatives and property managers can have a quite different focus.
I’d like to say more about property managers (PMs).
It is part of the property manager’s job to communicate between landlord, tenant, the principal of the agency, sales reps, tradespeople and so on. Not suprisingly, the issue of PMs being over-worked is very real. Most Perth PMs have 120+ properties and not all of them are experienced or good at their job.
I have had PMs of various capability but now prefer to manage my 4 investment properties which averages over a year at 30 mins a week per property – for a PM with 120 properties that equates to 60 hours per five-day working week – and that doesn’t account for the times when things break down, people are uncontactable or things are plain hectic, or the phone calls, or the auditors, or court hearings, or assisting colleagues, or compulsory professional development, let alone being unwell or new in the job!
As Chris pointed out, we all need each other to move forward.
Look after your tenants and with a little encouragement even a not-so-good tenant will usually improve.
But, if you don’t have the luxury of being part-time employed and managing your own investments, try helping your PM by:
> Know the property and be realistic about it’s weaknesses, faults and likely lifetime of fittings. Which is why depreciation reports are so practically beneficial.
> Prepare the ingoing PCR yourself and include as much info as possible – numbers of hooks/nails/powerpoints etc, lightglobe style and power, even paint brand and colour. For example, I initially provide all lightglobes of a good quality and energy-savers and specify replacements are to be the same. Generally this means excuses of not being able to see the dirt are completely absent.
> Take photos… with digital cameras, this is not difficult… and make a copy for the PM to provide with the lease. If you can’t prepare it all, do as much as you can. Tenants don’t argue with photos. In fact one of mine took a few photos after a tradie had installed a new oven which was a great update for me. Make sure photos are taken of ‘trouble spots’ regularly throughout the lease.
> Keeping track of who your tenants are and when their lease expires. Put in your calendar to check with the PM if they will renew or move on 4-6 weeks beforehand. If you have multiple properties it could be that you need not lose a good tenant, but shift them into a more suitable property.
> When contacting your PM, announce your name and the property first. This means they can pay attention to what you’re saying straight away instead of trying to figure out what to match up with your name. After a short while they WILL know you. Be nice to your PM. They have aspirations and responsibilities just like investors, and are often under huge pressure from their agency as well as the many different owners whose property they manage.
Remember, even gold mines have costs and expenses, and the operation of the gold mine is dependent on more than the ore in the ground, the manager, the quality and age of machinery, the processes for refining and the length of time in operation. However, all these variables can a big impact on profitability.
Comment by Melodie — February 3, 2012 @ 4:53 pm
This was a great letter by Chris, and more so, a wonderful response from Melodie, who is obviously an experienced investor. Having been a PM for 6+ years, the stresses & disorganisation of an office are well known to me, and Melodie’s suggestions are excellent on how to work in harmony with your PM.
Property Managers need more support & knowledge from their Principals who, more often than not, are sales based Principals who can often lack knowledge about their PM department. When times are busy & they need help, the reality, unfortunately, is that no-one in a Real Estate office besides the PM staff have any clue to help them out.
Bringing back sufficient training & record keeping into the industry will bring about a higher job satisfaction with lower stress levels, and therefore, hopefully, lead to a better relationship between all parties, and stop the back & forth criticism of each party as mentioned by Chris.
Landlords are rarely made of money, and tenants are rarely “scumbags”. Mutual respect & understanding often goes a LONG way!
Comment by Rachael Jenkins — February 16, 2012 @ 12:38 pm
I Couldn’t agree more Rachael. Property management is stressful and requires hard work, patience and training. In my opinion most are underpaid for the work they undertake.
Comment by Catherine Cashmore — February 16, 2012 @ 12:58 pm
Great letter written by Chris. I am a landlord and have property managers looking after my investments. I treat my PM and tenants with respect as i would like to be respected myself. Without the tennants and banks i wouldn’t be able to keep my properties. Like alot of landlords we are normal everyday working people trying to have have something for our retirement.I have good communications with my PMs. I must say the PMs put up with alot of stress and abuse from tenants and Landlords. I think that they are well underpaid for the stress that they have.NO I AM NOT A PM. I must say thought whenever something needs fixing on my properties we get it done straight away as it is in our best interest to keep the property maintained.
I do at times get very frustrated at the tenants as they constantly want you to do things eg the light bulbs need replacing or there is a nail sticking out of the deck eg. Sometimes you have to also help us out by buying the bulbs your self and getting a hammer and banging the nail in . Alot of silly things are so simple and easy to fix. We have been a tennant for the last 9 years as we have moved around due to my husbands work.We are back in our own house after 9 years away and the place looks great. Thanks to a great PM and great tenants.We only rang the agent when it was a plumbing problem or a electrical problem we couldn’t fix. WE did not phone for all the other trivial things we could have phoned up for BUT we fixed ourselves.
I have seen some properties that i wouldn’t put my worst enemy in but landlords like collecting the rent but won’t spend a dime. THIS MAKES ME ANGRY. I bet they would live in that place themselves but expect people to live in it and the hide to ask for good rent. SHAME ON YOU. In the same token i have heard of horror stories of great landlords that have had there lovely properties trashed bye horrible tenants. SHAME ON YOU. We are there to help each other out.
You pay rent but we have the repayments to the bank , the insurance , the rates and water rates the repairs and so on. Sometimes i think it is easier to rent as you only have to pay the rent and when there is a problem you just have to phone the PM.
Comment by sonja — February 16, 2012 @ 4:06 pm
Hi, I enjoyed reading this letter from Chris. I was a tenant at one point, and now I am a landlord. In both instances I felt a shared responsibility for the property involved.
I believe a good tenant stimulates a good landlord and viceversa. If I look after the property, so will the other party. After all, we both want to live in (or own) a nice place.
Comment by Gabriel — February 25, 2012 @ 4:37 pm