On this day after Valentine’s Day and our wallets all feeling a bit lighter it is important to remember who you should not be in love with…your tenants. Now don’t get it twisted of course you should care about your tenants as human beings and even love the fact that they provide you with the passive residual income the enables you to spend too much money on holidays.
What we mean is that you have to always remember that you are running a business and that personal feelings should be kept separate if you are serious about running a successful business. This can be hard to do especially if you are lucky enough to have really good tenants for a long period of time.
It’s In Writing
It is human nature to create bonds of friendship over time and since the rent payments that your tenants send you are a significant portion of their expenses you may be the first person they come to for a break in times of need. This is why it is crucial to have your relationship clearly defined in a rental agreement. This enables you to be protected and allows the tenant some breathing room in terms of making late payments. Of course there must always be a late payment penalty that is clearly defined in the agreement, but that may be something the tenant can handle and it allows you a way to “help”.
Have a (Small) Heart
Now there are of course exceptions to every rule and life can be complicated and full of unexpected traumatic events. If there are extenuating circumstances particularly in cases of poor health or natural disasters you should consider offering some assistance. But that assistance should (almost) never involve cancelling a rent payment that is due. Instead you can offer to work out a payment plan over a very short period. However, in no case should you permit rent to be more than a month late without instituting some sort of process to ensure that your income generating asset is protected.
As always the key is to treat your investment like the business that it is and you will reap the rewards of your efforts for years to come.
For additional information on how to treat your income properties like a business please call us at 305-517-3900.
We are pledged to the letter and spirit of U.S. policy for the achievement of equal housing opportunity throughout the Nation. See Equal Housing Opportunity Statement for more information.