Issue link: https://read.dmtmag.com/i/63983
COMMUNITY CONSULTANT Being A Good Landlord Does Not Mean Being A Good Friend BY FRANK ROLFE One of the biggest problems for most manu- factured home community owners (and man- agers) is dealing with tenants who expect you to operate the property to their benefit, rather than the investors.While it is true that a good land- lord provides a quality product at a fair price, some residents think that the owner's goal should be to cater to themwithout any attention to prof- itability. This constant strain is just part of being a property owner. But don't ever give in on this issue, or your community will suffer, as will your pocketbook. Where did residents get this idea in the first place? American culture has long portrayed the rela- tionship of the landlord to the tenant as almost like parent and child. In popular television from "I Love Lucy" to "Three's Company", the prop- erty owner watched over the resident and treated themlike a familymember, happily loaning them money and even bailing them out of jail. Ricky and Lucy even went on vacation with their land- lords, Fred and Ethel. And look at the unusual laws that California, Florida and New York have passed to even affirm this bizarre relationship – giving the resident power over raising rents, evictions and even property re-sale without a first option to the tenant. Can you name another business in which the owner is forced by law to cater to the customer in this way? Why is being nice a bad thing? It's not, unless you equate being "nice" with not keeping rents atmarket levels, or forcing res- idents to pay their rent, or allowing rules viola- tions to stack up like a pile of tires in a yard. Some people seem to have the strange idea that a "nice" landlord is a pushover, who lets the res- idents get away with murder. Case in point, I once purchased a property from a mom & pop who charged rents of only $100 per month in a market that averaged $325. Why? Pop told me MAY 2012 22 THE JOURNAL that he couldn't bear to raise the rent on his "friends". Clearly, this was nothing more than the residents taking advantage of the kindly owner, as I raised the rents to $275 immediately, and did not lose a single tenant. Your loyalty should be to the investors Whether you own the community yourself, or run a public REIT, the beneficiary of the invest- ment should at all times be the investors. They are the runs who risked their money, and they are the ones that should receive fair compensa- tion for the time, effort and risk. Every dollar that you "give" to the residents through being weak on collections, rent levels and such, is a dollar taken away from the investors. Don't get confused on who you are in business for. Being "nice" is acutally detrimental to the tenant Here's a shocking statement of fact: being "nice" to the tenants is the worst thing you can do to them. I'm not talking about not treating your tenants with the utmost respect. I'm talking about not making them conform to the rules. If you let a tenant get several months behind on their rent, they will never catch up. Sure, they'll try to save enough to get caught up, but the re- ality is that in today's world, there's always a car breakdown or a doctor bill that will preclude them from ever doing so. So what ultimately happens? They get evicted. That same tenant would be much better off if they were forced to pay their rent first, and to keep a roof over their head, even if it meant having the cable TV turned off and the cell phone out of service. Sometimes, forcing the resident to stay current is the best thing that you can do for their long-term bene- fit. Also, don't forget the impact on the overall community when you do not force the residents to follow the community rules. That one yard stacked with debris is not fair to the neighbors who have to look at it every day. You are actu- ally hurting the quality of life for the whole prop- erty when you are too "nice" to get the resident to abide by the rules that create a common good. And just like the rent, they'll dig a hole they can never pull out of if you let them let their property go. Understand that there are other business models that will take care of these things If a tenant cannot pay their rent, they should go to a business called a "bank", "credit union" or even "payday loan center". If they need appli- ances, they can go to a "rent-a-center". Help with food can come from"food stamps" and other social programs, including the local churches. The point is that it does not – and should not – all fall back on you. You are a landlord. You are not the federal government. But always be respectful and a good business person I am in no way advocating being a rude, arro- gant, or aloof person. Nor am I proposing that you offer a lousy product at a high price. I'm just suggesting that there is no correlation between being a good landlord and being a guardian angel. Conclusion Be a nice person. And be a good landlord. You just don't have to mix the two, and you shouldn't for the sake of your residents and in- vestors – and your own sanity. T J Frank Rolfe has been a manufactured home community owner for almost two decades, and currently ranks as part of the 28th largest community owner in the United States, with almost 6,000 lots in 17 states in the Great Plains and Midwest. His books and courses on community acquisitions and management are the top-selling ones in the industry. To learn more about Frank's views on the manufactured home community industry visit www.MobileHomeUniver- sity.com.