“I want to invest in rental property management so I can meet some nice people and make friends,” said nobody ever. Managing Redding and Chico rental property is a business and must be treated as such. Although nobody has said the statement above, there are plenty of rental property owners who have had similar thoughts in the back of their minds. It’s tough because there are those owners who may have had a bad experience with a property manager and now want to right the wrongs. They want to be the nice manager.
1. It’s a Business Relationship
Rental property management relationships are tricky for several reasons. First, it’s a business relationship, and those relationships are usually transactional in nature. In a typical business relationship, you buy something from someone, sign a contract, and then you may never see them again. If you have a bad experience it’s not that big of a deal because you just go to the competition next time.
In a property management business relationship, you are tied together for typically over a year or more. You’re basically stuck working together and to go somewhere else it will be a long and lengthy process.
2. Your Product is Someone’s Home
A home is a very personal thing that carries with it a lot of emotion. Providing a safe and comfortable living experience is important to any resident who will be living in your rental property. Mistakes can greatly effect a resident’s quality of life and emotions can run high.
Additionally, to many people an investment property is the biggest asset (or liability) that someone owns. It’s hundreds of thousands of dollars, and issues could end up costing massive headaches for the owner and resident to work through.
So just by nature this relationship is tricky and needs to be navigated carefully. Let’s look into a couple tips to help create the best relationship possible where everyone wins.
3. Don’t Become BFF
I would caution any owner to become friends with their residents. You can be friendly, but do not cross into the friend zone. It’s similar to the principle to never lend money to your friends, because if they can’t pay you back, you will most likely lose that friendship and things can get awkward fast.
Also, crossing the line into the friend zone opens you up to being manipulated, and you won’t be thinking as a business owner anymore – you will be thinking about your friends. Increasing rental rates, maintenance disputes, and deposit returns are all possible emotional landmines that can drain your time and energy.
I have spoken to so many owners who love their residents, and feel terrible raising their rents. It becomes a selling point for us as a property management company because we manage their rental property like the business investment it is, without our judgment being clouded by warm and fuzzy emotions. Think of it this way – if you were selling your house, you wouldn’t take off $20,000 because the family making the offer is nice. Sure, that would make them happy, and you would probably gain some friends, but the main point is that it’s an investment. When you lose sight of that things can go sideways.
4. Be firm up front
As a property manager, your residents need to respect you. Once upon a time I was a youth pastor and I would attend week-long summer camps. I would be assigned a large cabin with twenty or more 13-year-olds. I got some golden advice that always worked – be firm up front, earn their respect, then you can be nice on the back end. If you’re nice on the front end, and try to be buddy-buddy or “cool” it’ll be very hard to earn their respect or be firm later.
This is great advice. Make sure upfront that your residents are clear on your late payment policy, pet policy, noise ordinance, etc. Be firm and make sure they know you stick to the contract. Later on, if there is a family emergency, or something like that you will look like a saint if you allow a little extra grace period or make some other exception.
If you are too buddy-buddy you can set yourself up to be a door mat. Not only could they not respect you, but they could also disrespect your property as well. There is already enough entitled attitudes in our culture, you can’t allow yourself to be subject to that mentality as a rental property owner.
Some owners will disagree with me here and never for any reason allow an extra grace period on rent. This can also be a great strategy. Being consistent and automatic with all your policies across the board is also a fantastic strategy.
For us at Hignell Property Management the 7th of every month is when we process the 3-day pay rent or quit. If you haven’t paid rent up to the 7th, you will receive a notice on your door. If it’s not in by the 10th of the month then the possible eviction and collection process will begin. You’ll find that when the expectations are strict and clear, people tend to match your expectations.
5. Create a Balance
The goal of managing your Redding or Chico rental property is not to be a “nice” manager. The original English word for “nice” originally meant foolish, simple, or silly. You can be friendly, but if you’re going to be a great property manager you must never lose sight of the fact that this is a business.
There is a balance to rental property management relationships. That’s something that we here at Hignell Property Management strive to achieve. We manage over 1500 units in Chico, California. We’re strict and it’s clear we abide by our leases, but our goal is to create caring communities.
In all our larger properties we place a high value on relationships, but we do it in a way where everyone understands expectations. For example, we offer free breakfasts every Wednesday, free DVD rentals, and we cater many gatherings throughout the year to bring our residents together.
We hope that through our efforts our residents feel cared for. At the same time if they’re late on their rent, they’ll be charged a late fee. We’ve found the balance to engage in friendly relationship while simultaneously enforcing all our rental policies. It seems to work well and many of our residents stay at our properties for the long term.