As a landlord, how close should you be with your tenants? This is a point of significant contention among real estate professionals, as well as between individual landlords and their tenants, but the general consensus is that the relationship should be professional. Certainly landlords want to be liked and know some person information about their tenants – it’s hard to have a good relationship with your tenants if you can’t ask about their kids or pets or just inquire about their weekend plans – but there need to be some barriers. It’s a fine line, and one that can be hard to navigate when it comes to multi-family properties.
Many investors, particularly young investors, choose to invest in multi-family properties and then live in one of the units. This is a viable strategy for those who are new to the real estate, but it can also put a strain on the relationship between tenants and landlords. Is living in your own multi-family property too close for comfort when it comes to tenant relationships? Here are a few factors you need to consider before becoming your tenant’s neighbor.
Intrusion And Access
It’s a basic fact of real estate: good tenants hate intrusive landlords. Yes, they want you to be responsive, but they don’t want to be forced to interact with you all the time. What’s more, you still need to respect your tenants’ rights. You can’t just drop by to examine the apartment when you feel like it, for example, after your tenants have a party; you must continue to abide by the terms of your contract and the restrictions established therein. This is one of the reasons that property management companies are so popular with landlords; it allows for a more hands-off relationship and reduces tensions between landlords and tenants.
Of course, this situation goes both ways. Just as tenants don’t like to be intruded upon too often, when you’re neighbors with your tenants, they may also be the ones who are intrusive. Some tenants are very demanding or needy and if their landlord is next door, they won’t try to solve problems on their own. Every small issue will suddenly be your problem, from clogged toilets to drafty windows, regardless of the time of day. It’s much harder to enforce office hours when you live in the next apartment.
Too Much Insight
Tenants may not be property owners, but they still expect to have some degree of independence in their day-to-day lives; they don’t want to reveal everything to their landlords. At first, this might seem sneaky or dishonest, but do you really want to know everything about your tenants? Do you need to know if they have an occasional weekend party or stay out late at night? Too much information can change your opinion of your tenants and they’re often held to a higher standard in terms of property maintenance and communication, among other elements of the tenant-landlord relationship. Additionally, knowing too much about your tenants’ daily life can be especially prejudicing if you’re renting to groups who already face discrimination in the real estate market, such as young people, families with children, and people of color.
As with the above issue of access, too much insight is a problem for both parties when you’re neighbors with your tenants. What happens if you want to have friends over and you’re making too much noise? Will your tenants feel comfortable complaining to you? Most tenants are comfortable addressing noise issues with their landlord if it’s about another tenant, but will worry that their lease won’t be renewed if they complain about the landlord. There are innate conflicts in being both landlord and neighbor because every interaction is influenced by the power imbalance.
It’s All Rules
Ultimately, the only way to maintain a healthy relationship with tenants if you’re also their neighbor is by setting a lot of rules. Of course, you want to have clear policies in any rental situations, particularly about upkeep, pets, and guests, but your rules need to be even more particular when sharing a multifamily property. Experts on this type of relationship suggest making rules about parking, parties, pets, and even grilling. Anything that could potentially cause conflict needs to be put into writing, and that means you have to pre-adjudicate simple etiquette issues. Otherwise, daily interactions can become contentious.
It can be frustrating to mince every interaction before they even happen and before you know your tenants, but it’s one of the only ways to keep the peace. The other issue is that you need to abide by your own rules if you’re going to be neighbors with your tenants. That can feel oppressive, and it can defeat the purpose of investing in property – to become more independent. While it may seem financially beneficial to live in your investment property, it can end up being so frustrating that the added expense of moving out is worth it. Plus, you’ll be collecting two rents once you depart.
Alternatives For Landlords
As a landlord, your best option is always to live in a separate property from your tenants, but if you live in the neighborhood, even that may not be enough to establish a firm boundary – and that’s why hiring a property manager is important. Property managers act as go-betweens, handling maintenance calls, collecting rent, and even screening tenants. They settle the conflicts that would otherwise fall in your lap, and that’s especially important if you’re neighbors with your tenants.
If you’re looking to shift your relationship with your tenants, it’s time to bring a property manager onboard, and Green Residential has everything you need to succeed. With over thirty years of experience in Houston-area property management, we’ve conquered every challenge you can imagine, and we’re ready to grow and innovate with the industry.
Contact us today to learn more about our full-service approach to property management and how we can help your investments grow and thrive.
It’s important to establish firm boundaries in your relationships with tenants, but that’s not always easy, especially within a multi-family complex. Let us hold the line – you don’t need to do it alone.