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Real Estate: Is the tenant - a burden?
Thursday 15 October 2015
Protection for tenants, discounts on the rent, outstanding rental payments, regulations and cumbersome rules, you hear the worst stories from landlords about their tenants. Many homeowners are frustrated and have given up on the rental business. That, in my view, is a mistake.
It is a well known fact, that the relationship between property owners and their tenants is tense and emotional. You prefer not to hear from each other. That would, however, be the wrong approach.
Whoever offers accommodation for rent, will have to deal with people, whether you like it or not. People who can not cope should refrain from taking part in the rental income business, they would probably sleep more peacefully owning stocks and bonds instead.
Whoever rents out their property portfolio, should keep three points in mind:
. Take great care in the selection of tenants. A lot of trouble can be avoided from the beginning. It maybe better to leave an apartment standing empty
for a period of time and not collect rent than renting to a troublesome tenant.
. Do not charge the highest rent. Even tenants have a sense for what is a fair or exploitative rent
. And now a particularly important aspect in my view: do not consider tenants as a burden but as customers. A very successful friend of mine, who is
large-scale developer and owner, pointed this out to me repeatedly. He described the event as follows: Just imagine for once that you owned a small
factory. Your customer would provide you with a monthly turnover of EUR 1.200,- and this would go on for years. How would you treat this client?
Would you not go out of your way for him?
What are your thoughts when the conversation turns to these customers? I am confident he would be a precious asset to you, a loyal customer is one of the best customers you can have. Your tenants fit that description too. Every month they will put money in your pocket.
. When did you last congratulate your tenants on their birthday? When was the last time your tenants received a Christmas card from you? A bouquet of
flowers for a wedding? While also paying some attention to the high school achievements of the tenants' son? When did you last thank your tenants for
the punctual payment of the rent?
Especially now, in a "zero-interest income" environment from bank deposits and bonds, I consider regular, predictable rental income a blessing. All the more
reason to see tenants in a different light:The tenant - is my client.