Problems and More Problems
September 1, 2004
No business is immune. Every business has problems. How they affect you and your rental-property business is determined by how well you prepare for them.
If we could just vaccinate ourselves so we wouldn’t get problems, that would be terrific. Fact is, we almost can. Vaccination comes through preparedness. You might get a little sniffle, but you won’t get sick.
We are already pretty much prepared for the physical problems. If something breaks, we fix it or get it fixed. If our property needs painting, we paint it. If we want to buy more rental property, we find a good one, and find financing. If we want to sell one, we find a buyer and an exchange facilitator, so we can defer our capital gains taxes.
Physical problems are annoying, especially the ones where something has broken and we have to fix it rather than do something we would rather do, and spend money we hadn’t planned to spend. We still feel as if we are in control. We know what to do, and we know that the same way we fixed it before it will work this time, too.
The problems that so many of us find excrutiatingly irritating and, at times, overwhelming are people problems. They are less straightforward and can’t always be solved with the same procedure every time. Or can they?
Most businesses larger than two-man operations have human resources policies and procedures. They have those because that way there is no question about what to do whenever an employee dispute or question arises. The Equal Employment Opportunity Act and similar laws have made it a necessity for businesses to have written employee procedures.
Large property management companies have tenant policies and procedures, in addition to those for their employees. The Fair Housing Act has made it a necessity for property management companies and large apartment complexes to have written procedures for handling as many tenant situations anyone can think of.
Having tenant policies and procedures puts you in control. Without them, you make up rules as you go along depending on your mood at the moment, how good a story your tenant has, how many problems you’ve had in the past with him or her, and any number of other biases that will creep into the mix. Every one of those variables can put you on the receiving end of a Fair Housing complaint, and could irritate a good tenant to the point of moving who feels he or she was treated unfairly.
Written policies and procedures make problems speed bumps instead of mountains. Once you have established written policies, reminding tenants of them is all you need to do. Then enforce whatever the policy is the same way every time for everybody. No guesswork, no claims of favoritism, no trying to remember what you did last time something like this happened.
Our problems are only as big as we allow them to become. Being as prepared for the “people problems” as well as you are for the “physical problems” can take about 10,000 feet off the height of the problem mountain.
Where do you get policies and procedures, or how do you create them? One source is other landlords. Your local rental owners, apartment, or landlord association is full of them. Ask what they have done to take and keep control of their rental properties.