My father was built like a linebacker and hollered like a coach. One evening in the late 1950s, I accompanied him as he went door-to-door to collect rents. A tenant called Schoenfeld—I only recall his surname—paid his rent reliably, but he was always a month late and he didn’t include the late fee. This drove my father “nuts.” That night, he unloaded on him. When I asked my father why he had to be so hard on Schoenfeld, he had a few choice words for me, too.
“Stevie, you’ll go to one of those pom-pom colleges,” my father said. “I graduated from the school of hard knocks. You’re too soft. Don’t be a wimpy landlord.”
Today, I, too, am a landlord, and have been for the past four decades. Along with my wife, I’ve owned 30 or so properties over the years, and we still own 12 today. I never wanted to be a pushover for my tenants, but I also never wanted to pulverize the lives of people who, in some sense, were in my care. Folks who rent worry about their safety, their comfort and their budget, just like homeowners do. Pride of ownership is fine as far as it goes. But what about pride of partnering? Of course, there’s an inherent conflict of interest and a hierarchical relationship between owners and renters, but I believe there’s also a common thread. Both want a living space that’s functional and presentable.
Partnering doesn’t only help the renter. We once had a scheduling snafu and couldn’t arrive in time to meet a prospective tenant at the property. The vacating person offered to show her around the apartment on his own time. I like to think he was returning the respect he received during his stay with us.
Though never reviewed on Yelp!, I know I’m appreciated. In the midst of the COVID scourge, we voluntarily renegotiated leases and, in one instance, gave a single working mother a two-month rent holiday. We set up a delayed payment schedule for a valued renter whose finances were temporarily tied up in a divorce proceeding. Over time, I collected almost all the rents due. A prospective buyer of a fourplex once requested multiple walk-throughs that unduly inconvenienced people. We gave everyone a onetime $25 rent credit.
Compassionate landlords are often derided as naïve by the real estate cognoscenti, who say our trustworthiness is just a cover for our spinelessness and that we’re frequently duped by deadbeat renters and unscrupulous service people. Unfortunately, I think this is sometimes true, and it behooves landlords to be vigilant.
I made a colossal blunder in 2015, when a fire destroyed our 16-unit Victorian office building, the crown jewel of our mom-and-pop enterprise. To my dismay, I discovered that I’d neglected to get insurance coverage for loss of rents. For five months, I had the usual fixed expenses like mortgage, insurance, and property taxes, with zero income to pay them. I can still hear replays of my father’s admonition about my unfitness for business.
Remember those eight wonders of the world? You’re probably also well-versed in the wonders of jacking up rents as fast and as high as local regulations permit. Besides being repugnant, that playbook is financially counterproductive. It’s a sure way to alienate renters and motivate them to suddenly come up with problems that need fixing.
That brings me to some real estate blasphemy: Macho management is a losing financial proposition. I don’t like to raise rents too much because I risk losing good tenants. In my book, if there are no calls, no problems and reliable rent payments, I’ll only ask for a small increase. Recently, however, I blew it. I raised a responsible renter $100, and she left in a huff. “So, what,” you say? “Just increase the rent by $200 on the bloke coming in.” Talk about naïve. First, I had to primp the unit, including $200 for carpet cleaning, $175 to caulk the tub and another $200 to fix a leak under the kitchen sink. Next, I had to pay $5,000 to paint half of the two-bedroom duplex.
Sound bad? We aren’t done yet. Throw in a month’s “rent up” fee—the payment to a real-estate broker to find us a new tenant. Add in the lost income from a unit that’s vacant for at least a month, while we prep the unit and find a new renter. It might take over two years to recoup these various expenses. I’ll place my bets on longevity any day. Ditto for my property manager, who has held my hand through 38 years and many rocky times.
By my parents’ standards, I was never cut out to be a landlord, and I’m still haunted by my father’s misgivings about me. My life and career were jumpstarted by the diligence and perseverance of my parents, and—strange as it may sound—that’s made me glad I’ve been a responsive, caring landlord. I feel doing so has enriched the lives of my renters, folks who didn’t get as good a number in the birth lottery as I did.