Patience with applicants, tenants and the market can be tough for landlords with anxiety, but it leads to better tenants and long-term investing success.
As one of the famous seven virtues, patience has been pondered over and preached about for most of human history. Just doing a quick internet search will produce quotes regarding patience from every century and from people as diverse as Gandhi to Axl Rose.
For most of us, there is no greater test of patience than driving in the car, where we are clearly a better driver than everyone else on the road; there’s just something about being behind a slow driver in the fast lane that brings out our inner traffic monster. Believe it or not, patience, and its evil twin impatience, affect each of us as property owners in a couple of different ways that we will discuss below.
PATIENCE WITH THE MARKET
Anyone who owns property has experienced the whiplash of the real estate market rollercoaster over the past few years.
You likely fall into one of two categories: 1) you bought property as a knee jerk reaction to rising prices and now are panicking as the market has softened over the last 6 months, or 2) you sold your property at the top of the market and are anxious to get back in the game but are afraid you haven’t seen the bottom of the market yet.
Both scenarios present their own unique challenges, but the same solution applies to both; have a little patience.
Although your situation may be an anomaly, most of us can wait 3-6 months to see where the market is headed, allowing us to take a deep breath and make a calculated and educated decision on what to do with your portfolio. Don’t go chasing the latest trend and stick with the tried-and-true principles that have made investing in property the best game in town.
Patience almost always prevails in an unpredictable market.
PATIENCE WITH APPLICANTS
Given our diversity in what we own and how we manage, we all share the same goal as a property owner, and that is to have our properties full of good, qualified, paying tenants but it takes patience with applicants.
The pipeline for good tenants starts with being consistent in applying your criteria during the on-boarding process.
We tend to want to get the property filled and get cash flowing, even if it means skimping on our requirements or skipping them altogether. Our goal when we have a vacant property is to fill it as quickly as possible, so it is the tenant’s cash covering the bills and not our own. Operating in “survival” mode is the worst way to manage as it forces us to make decisions out of desperation.
If you are in a hurry to get that security deposit and the first month’s rent just so you don’t have to cover one month’s payment, you will take the first warm body and that almost always ends in disaster. Instead, adopt a long view approach and use your well-established processes of criminal background screening and financial qualifications to identify a 5-year type of applicant that will cover your next 60 mortgage payments, not just the next one. Again, patience will pay dividends
PATIENCE WITH TENANTS
Every landlord has at one time, or another had a tenant that pushes them to their limits, whether they are extremely needy or delinquent in getting you the rent.
Unfortunately, it’s just part of the business… but so is being patient with them. Just like us, life has a way of reaching into our tenants’ lives and dealing them a bad hand from time to time. When it comes to protecting the roof over their heads, tenants can quickly become extremely defensive and start making thoughtless decisions that cause most rational people to shake their heads.
An extra dose of patience goes a long way in calming down a situation and re-establishing the expectations of you as the landlord. Plus, it protects the property as an out-of-control tenant can do more damage to the property in a matter of minutes than their security deposit can cover. As a professional you do need to include the rules and regulations regarding your property in your lease so when patience has run its course and it’s time to remove them from the property, you aren’t the one making impatient, irrational decisions,
Mahatma Gandhi famously stated, “To lose patience is to lose the battle.” Those words rang true 100 years ago and they are just as true today. Although we don’t always view this way, our business, our livelihoods, are a battle, and patience is a key to victory. When you are confronted with the next challenge in your investment career, whether it is the market, your applicant, or your tenant, just remember what Axl Rose sang into existence: “Need a little patience, just a little patience, some more patience.”
About the author:
Scot Aubrey is Vice-President of Rent Perfect, a private investigator, and fellow landlord who manages short-term rentals. Subscribe to their weekly Rent Perfect Podcast (available on YouTube, Spotify, and Apple Podcasts) to stay up to date on the latest industry news and for expert tips on how to manage your properties.