Tenants are People - Talk to them

In the world of being a Landlord, we get busy being in our worldview and tend to shy away from difficult conversations and/or accountability conversations all while trying to maintaining a solid professional relationship with tenants.  Some say "that's their job, I should not have to talk to them" whereas others will say "I want to be a nice landlord". In reality - we "The Landlords" are leaders of our rental properties and we must take appropriate actions in order for the property to hit its goals, otherwise, we are not leaders at all.

Recorded:
Recorded July 2020

Host:
Kassandra Taggart
Dubi Rivera

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Book: Pain or Profit

Sponsor:
Real Property Management Last Frontier

Transcript

Kassandra Taggart: 0:31

We have another special guest that I'm very excited to introduce everyone to her name is Doobie. What's very special about her is her amazing people skills. The skillset is something that many landlords need to have or develop because it helps in many difficult and frustrating situations with tenants inside of our company here at Real Property Management in Alaska, as a result today's conversation is all about having conversations with tenants. Deescalating situations and how the power of communication builds trust, avoids headaches, and grows our profits. So welcome today. Doobie. How are you?

Dubi Rivera: 1:07

I'm good. Thank you for having me.

Kassandra Taggart: 1:11

What is your current role inside of Real Property Management?

Dubi Rivera: 1:15

I am, I'm one of the licensees resident coordinator. I basically enforce, help enforce the lease and basically servicing tenants, helping answer any of their questions and tenant retention.

Kassandra Taggart: 1:27

It's a busy role, especially with how many tenants we have these days. So, how does your role in the company provide insight or help the, do it yourself, community of landlords or landlords out there listening to those show today?

Dubi Rivera: 1:41

Basically, when there is an issue that comes up, when with a tenant or has to deal with like an HOA or, any sort of issue that comes with the lease agreements. A common thing that DIY landlords have to face is, having to bring that up to the tenant and making sure that they don't jeopardize the working relationship between themselves and the tenant. Bring something up to enforce the lease, provide notice, or anything regarding that doesn't mean that you have to, ruin what you have with that tenant. Whether it was a great relationship beforehand, or if it was already, not really the best and, you feel like you're making a worse. So basically it's being able to say no being able to stand your ground and, just being able to help explain that and how to do that accurately.

Kassandra Taggart: 2:30

Yeah, I agree with you that it's difficult to say no while still maintaining the relationship and not jeopardizing it to be a difficult relationship for the remaining part of the lease. So it's a balancing act. That's for sure. I agree with you. I believe every landlord has a tenant and I'm pretty sure many listening today will hear me on this one that likes to submit many work orders over and over and over. And they become picky or annoying. what are some of the tactics at handling the stress of a picky tenant

Dubi Rivera: 3:03

Most of the time when they're freaking out because they, want something completed. A part of that kind of helps with that is if you explain to them the updates and. The process of how to complete what they're asking for. It usually does help them realize the realities of certain things, we can't change your home floors like overnight. Sometimes it does take time there's so many different parts of the process that need to be taken care of and that need to be done so that they don't end up with a half done job or with a poorly done job or something along those lines. Another thing is you also want to make sure that you're completely listening to them. Sometimes their concerns they'll kind of mask it with just anger and wanting it to be done, but sometimes it could be they're really thinking about the safety for their other kids or. There's something else going on in their lives. And they're kind of just bringing that up at the same time. It's kind of something that you really need to look at and you want to make sure that you're giving them time to explain, versus just instantly writing off all of their concerns or, any questions they may have Sometimes they need to be brought back to realizing how things do work. And sometimes what they might be hearing is a no, but really it's not a no, it's just. We're going to have to wait at this time or, it's going to have to be postponed. And then that could be for a lot of different reasons. And I bring that up because for example, there's one time where we did have a tenant and it was it was the wrong middle of winter. And they did have, a porch concern where the porch did not seem as if it was as stable as they would like it to be. And. The tenant, they really, really wanted it to be fixed that same day. They wanted somebody to go out and to deal with it, but our vendors, they were all there. All of their recommendations were, Hey, we should probably wait until the summer. it's really, really cold in the winter for Alaska. It's, you're risking, lots of money than doing it in the summer to, possibly not get the best result. Like you could, if you were to. Complete this, and then summer, the tenant did have other means of access to the property. And it was something of like, Hey, we're, we're not saying no, it's just, we want to make sure this is done right. And it's done right the first time for you. And so we're going to wait until the summertime so we can get this completed. And the tenant was actually really understanding at that point. They really, they really understood why they needed to wait and the. They were really happy and did make the, the accommodations to be able to access the property, with the other the other entrances and the tenant is super happy and the job looks really great. But it would have been, much more time. It would have been just a lot, a bigger scale, For doing something in the winter that second, because the tenant wanted it that second versus just waiting a short period of time to be able to get it done right. Once and done completely. And, and this tenant they also had those concerns because they, the, the property, during the earthquake, it did have a little bit more cosmetic cracks and things like that. So they were also kind of just worried that. their, their property that they, that they were living in was probably unsafe. We ended up getting that checked out and everything was good though, but that's also another piece of that puzzle was, they were just feeling as if the property they were living in was maybe not the safest and didn't really understand the realities of that scenario and that situation. And the greatest thing was, is they were safe in the end.

Kassandra Taggart: 6:59

You did a beautiful job of explaining, like the story in the sense of how it started explaining education is the power of this communication. And in this particular situation, what a lot of people may not know is that that tenant was so upset in the beginning, they were doing multiple emails, multiple phone calls, just harassing and haranguing everybody, because they were. scared, so that we're acting out of the fear of being scared and they were using the method of being angry to get attention, to get something done. So sometimes just listening and then starting the education process is the thing that can get them over and forward to a solution. But you have to be patient to get through all of them. Fears and their emotions and their, and their tactics of how they communicate to get their attention before you can get to a solution. So, that's the reality, and I think your, your advice is very accurate that listen first, then solve and go from there. I want to go onto the next conversation cause a lot of the landlords have this issue and. They use excuses to not pick up the phone and have a conversation. They use the excuses because they're scared to call people and say pay rent. But one of your early assignments, when you started here at real property management was calling tenants and simply asking for the rent payments and. I know when we first gave that assignment to you, it was a little daunting, but why don't you share some light of what went through your head? What would through the process and how it actually happened when you started making those phone calls and building the skillset of, of having the conversation about pay your rent?

Dubi Rivera: 8:38

Well, it was definitely, a first it was kind of my first time really into like property management. And I think the DIY landlords will be able to really relate to this a little bit because, sometimes they're, they're just new, they're new to the whole scene and getting to do that. And sometimes, you might buy a property that already has tenants in it, and it's just, having to put things together and fit the pieces to. Figure out what had happened before you even knew anything about it. And for me, it was a lot of hours of just listening to tenants and. what they had to say about their situation. I think there is a great thing about being someone new to a property and being another ear, because it does give tenants more of a sense of trust and understanding that, Hey, there's this, this person, might be able to understand what, where I'm coming from and understand what's happening. And it was. just really realizing they need an outlet to be able to understand where their current financial situation is. And most of the time they really say more to really help you when you really listen to them on, their concerns, whether, sometimes it's just a family struggle, there's a, our father had passed away and he he'd made most of the money and now we're just scrambling and, and really getting to understand. Where the beginning of the, the problem was and where they started to go downhill in their rent payments. Sometimes it was, really easy as like, sometimes we're like, Hey, I'm sorry, I'm late all the time. My. Paychecks have changed. I now get different pay dates. So now I have to split money here and I have to split money there, and this is kind of how it's working. And sometimes it's, it's those, those answers sometimes it's a personal one that sometimes it's just, it's all sorts of different things. And so really understanding, and, and not being there to be this mean. Like person of like, you need to pay rent. Now I'm going to evict you. It's more of coming to them and be like, Hey, what's going on with your rent? Let's let me know what is happening here. Let's see how we can fix it. Let's come together. let's have this conversation so that we can. Trying to help you out in your in your, your account here in your, you don't want to be sent to collections in the future. Let's see what we can do to avoid that. And knowing them, knowing that you're there to help them and not necessarily, want to kick them out. The second that, you see how much they owe kind of gives them a more kind of gives them encouragement to want to bring their balance down and to, feel like there's hope for them that they can actually do that and achieve that.

Kassandra Taggart: 11:13

I agree that just having the conversation as the first step, the second step is once again, listening to the story and engaging in the story and walking them through that, there is hope, but they just need to communicate and find a solution together. How a, we all know that some tenants. Sly some tenants don't tell the four story and because they do that to delay or create tactics or for many reasons. So how have you grown the experience of knowing when they're lying or telling the truth? So that way you can make decisions to create payment plans or arrangements to avoid collections and evictions at the same time, make a win-win for the landlord where they're collecting some money. So, what have you learned to get through that

Dubi Rivera: 12:04

most of the time? You. And doing this for a while, you start to realize that the reason why tenants lie in the first place, it's just a reaction to them being scared. This is their home. This is, their, their safe space. And now that they're safe spaces, in jeopardy, they, they want to do as much as they can to, hold off on having that hard conversation of. this, this safe space of yours could be taken away because of what's going on right now. And so they're scared and, and that's just the, their instant reaction to being that is just to lie. And sometimes, they're embarrassed about mistakes that they've made. They're, just going through a lot, in a sense of, their choices or, what just happens to come about in their lives. And. One thing that is crucial is really just to let them know that, when you're coming to them, that it doesn't have to end in eviction. And it doesn't, it really does not have to end in eviction and it can be a situation where a payment plan can be, can be made for this, this tenant. As long as. You started off with let's do some contingencies first, you don't want to instantly open your arms to someone who has been, very closed to you or not really wanting to also help themselves. So that's something also to consider. I would normally start off with a, like, if you make this payment, so like you can do, let's do, let's do a 10% down and then let's get you on a payment plan or, If you pay, a hundred dollars today. And you do, 200 tomorrow then sure. Let's get you on that. And that's starting that trust is, is that starting to build that and you're starting to see whether or not this tenant is true and is real to wanting to keep their place. And that's a really great starting point. And I do that a lot with tenants just to really see if, cause you don't want to spend the next couple months. Trying to see if they're willing to bring their bones down or to take that chance because you've already lost, however long it was since their last payment. So working with them does, does really, really help. And just really. Understanding their situation, like I've said before in, in to getting there. I do remember I did have these tenants, so it was a family situation that had happened and they had to go down to the lower 48 and everybody knows how expensive that can be and how expensive Alaska is altogether. And so they did have to take some time down there and they really just, they didn't have everything set up to do that, but I mean, family comes first, So they did, they just took the chance they went. they, they. Did everything that they had to do during that time. And we had lost all communication with them. They were not responding to us. they were just completely cutting us off. We would, we would knock on their door. No answer. No ratings slowly the, the phones started to say that they were no longer in service. And then we only had one number that we believed worked, and yet that one was always sent to voicemail. And it was just a constant struggle. And then. Finally, when they did come back, and, and they spoke to us they had explained what was going on, after some time of trying to, Dodge us because they were embarrassed and scared and, and everything. And then eventually we, we. Did a percent down like, Hey, we're going to 15% down of your total balance. We'll do that. And we'll start a payment plan. And I started to kind of get in with them, the explanation of how this payment plan is going to work. The payment plan specifically was fitting when their pay dates were so that they knew once they got paid that, Hey, I remember I've got to pay this now. I don't want to, we don't want to give them the ability to, have some, some days to be able to just, put that money somewhere else. And it fit really well with, how their, their payments were coming through and believe it or not, we are now$2,000 down from their original balance. They pay rent. On time each month. And they actually pay more than their scheduled payment plan now then then. What they would have been doing if we hadn't, stepped in and talked about it now that was able to allow us to avoid the eviction. We now receive rent payments on time each month, plus for past balances. And now these tenants, don't have to go through, having that on the record. There's nothing sent to collections and hope that we receive that money. There's something in place that's helping us. Get that for the owner. It did take some time, but we finally got there and it is so much better than what it could've been and taking that chance and being able to work with that tenant. And once they really felt comfortable in the situation, they, they really, they enjoyed it and they are really, really happy right now. And they're so happy that they're even paying more than what they're they're scheduled to do. So they're actually going to be done with their payment plan here soon.

Kassandra Taggart: 17:04

I think you said it well, when you said what I like to call the carrot approach. It's okay. You want my carrot and you want it more than anything. So I'm going to give a little piece of the carrot to you. And if you reach out and try to grab that carrot and we start building this trust, that's how you can tell the liars from the ones that are really trying, and then you can eventually give them the carrot. And then we're all happy. Cause they're fed and they got their carrot and we can keep growing more carrots to give to them. So it's the carrot approach. So. The the reality is, is the easiest way to tell the difference between the liars versus the others is written agreements. And they actually do, Hey, I'll give you this. If you give me this and you do bite-size until they can finally wrap their head around it, everybody builds trust with it. And we start making progress because if there's no progress, obviously the eviction is the route. So I think that's an amazing story because you're right. Doesn't have to end in an eviction. I think would be helpful for others to hear about is that at our company, at real property management, we make it mandatory to have renter's insurance. We don't make it mandatory because we're mean evil property managers. We don't do it because we're trying to be mean landlords. We do it because we're trying to protect the financial interest of all parties involved in the transaction of managing and leasing of real estate. Right. So how are you able to talk to tenants about renter's insurance and about the processes of it when they're upset

Dubi Rivera: 18:39

most of the time, their main, questions and what kind of gets them. Upset is really why do I need to have renter's insurance? why is this a requirement? And the thing is on that one, it's basically, it's, it helps everybody involved whenever there's an accident or, there's something that was not expected that happens at the property either by the tenant or, by a neighbor or something along those lines. And that is like an extra layer of protection for both the homeowner and the renter themselves. for example, you want to make sure if, if you're a renter and. Let's say that you, you accidentally leave a, a stove running and things catch on fire, which is a really common thing that happens. everybody's gone through at least like almost a scare of that, if not the real deal. you want to make sure that you have that coverage to you. Don't have to pay that out of pocket. You don't have to you didn't just lose your entire kitchen full of, all this food and all of these items you would purchase. you would want to have that getting taken care of for you. And that's really what that renter's insurance does. And you having to owe all of this money to the landlord, doesn't have to be a reality. Your insurance company can have it be taken care of for you. You can have this safety blanket for you that can take care of these situations that are. Very real. And they do have been, and sometimes people are like, eh, it's not going to happen to me. And then, it could, it could happen. That's and that's the thing that people need to really understand is that it's helping people and it helps people every day. And we want to make sure that our tenants, if anything were to happen like that, they would have that safety blanket. They have that something to latch onto. That's not going to. Yeah, make them homeless or, get them in that financial distress to, be open to any sort of like lawsuits or to anything. And that's essentially really why we require it. And we always make sure that the tenants are up to date on their insurance. So what happens there is if we get at RPM, a notice of cancellation from the renter's insurance company, usually what that means it could mean that, the tenant had just canceled their policy and they're going with another another company, or it could be that they accidentally missed a payment. and didn't really realize it, or, anything along those lines, it could be a number of things when we receive that. We always reach out to the tenant and we're like, Hey, we just received this notice of cancellation. We need you to turn in new documents. And most of the time tenants are like, well, I've already renewed. And the issue there is it kind of, it leaves something open of, Hey, your insurance company told us that it's being canceled. You want to make sure that you didn't just get someone on the phone and told them who told you everything's all right. You want to make sure you have been in writing. You want to make sure that if something were to happen. The next day they can't, go back on their word. They can't do anything else or say anything else, aside from what you remember, you were told. And there's also that level of well, did I understand incorrectly? Did I really, know what they were trying to explain to me when they were saying this and, and things like that. So if you, you get that documentation, if you get it in writing. That's like another level of safety for you for your policy itself. And so we always require for tenants to turn in a renewal so they can there's a reinstatement policy form as well that we get sent over from the insurance companies. Once payment is made. Also if they switch over to a new insurance company, just sending over a new declarations of the policy is another great. Proof of insurance. And things like that that really even keep the tenants to make sure that they're up-to-date and that they have everything correctly done. And then sometimes it also has to deal with having to explain it to them. what certain pieces the insurance is. I mean, we're not insurance licensees but we can be able to help them make sure that they get certain levels of coverage, and for example, like we require 300,000 personal liability coverage so but ultimately having renter's insurance making sure that your tenant is up to date on it is very important, making sure that they are accountable for their renter's insurance. And making sure that all of the information is up to date is really important.

Kassandra Taggart: 23:09

Well, let's talk about the scary, scary conversation about lease enforcement. Every time there's a chat on the landlord's forum, it's usually around how do I do lease enforcement? We're typically finding violations by doing property walk. Throughs, but performed by maintenance teams or other tenants complaining about the other tenant would drive by and notice something. Or third party happened to go into the property and report something. Or we get the phone call from the police department. So we hear about the violations all the time from different avenues, different places. How would you describe. The conversation, bringing up with the tenant about lease enforcement when you're having to give them the bad news that they broke it. Yeah. We had to find for it and where we go from here.

Dubi Rivera: 24:00

So it really just depend depends on what stage you are with the tenant themselves, are they new? Like in this scenario, let's pretend that they're a new tenant. They were just placed, they're excited about their new place. They're going to start doing whatever they need to most of the time you really want to be, you want to make sure that you're not Making them feel as if you're, going to be critiquing everything that's going on. cause they, they, they do want to be able to have their own lives and they are just getting their first new impressions of this property. And the owner itself you do want to make sure that you just. You've provided them all of the documentation that they need, whether it is like HOA rules, whether you have house rules itself, make sure that they have that ahead of time, because that really will help you be able to explain, Hey, I've got this paperwork here for the HOA. These are some kind of rules. It does look like you're doing this one right now. Can we please, figure something out so that it doesn't happen moving forward. And most of the time, surprisingly, you'll actually get tenants who will understand what's going on. I've gotten several tenants who were really awesome. They're like, Oh my goodness. I am so sorry. I didn't know that that was a thing I skipped it or something along those lines. And then they're really. they're really awesome. And you can, you can kind of go from there. Now, if you have a tenant who is, consistently, violating HOA rules, violating your house rules and things along those lines one of the main things that you really want to do is make sure that you stay stick with your word? I, lot of owners will be like, well, where we're going to, we're going to post this. I promise you, we're gonna, we're gonna do it. And just continue to give notices. You do want to make sure that you have to backfill those, if there's an HOA fine, you have to realize that you can back bill the tenant for that. And you want to be able to start doing that because once they start to see those fines, they'll start to realize that it's no longer just a piece of paper being thrown at them at their door or being posted on their door or hands. Or anything it's, it's a reality. It's something that they're doing that they need to stop. And that kind of kicks them to that. Now that does also start the conversation of, this tenant is not mad at me because I'm being, they know they're being charged this, but having that conversation of explaining to them, Hey, you're the ones who are causing this one. I did give you this many notices. I did, come to you. And I explained this to you several times. Unfortunately, It's about fill on your account and you have to pay for that. And just really telling them what is going on, just why it's happening. Just going into detail on that one. And, and essentially that's, it, it's a difficult conversation. But ultimately, I mean, I've never had A tenant, go, ballistic in, in, in the sense that they, stopped paying rent altogether. That's never happened. they've been, Oh, that's, that's super annoying and have threatened to do so and have threatened to, all these sorts of things, but ultimately. Most of the time, those people know that this is their home and this is just one fee. And that moving forward, they have to adjust themselves. They have to fix it. And ultimately it does get done.

Kassandra Taggart: 27:10

You're correct that you got to hold people accountable and then walk them through it. And if you say you're going to make a threat, you need to do the threat. You can't just sit there and not do the threat, and then you have to hold them accountable. It's not about being mean it's about holding people accountable and there's a process to it. And if you don't hold yourself accountable to holding them accountable, Nothing gets done. That's the reality of being in a tenant situation is that you're now like the mom or the dad that has to enforce tenant behavior and you got to come through with it and you have to have the courage to do so sitting back and not doing something is worse than Speaking up and being maybe wrong about what you said. So in my opinion, what needs to happen is landlords just need to have the conversation.

Dubi Rivera: 27:59

Yeah, I would say that that's a great way to approach it and really just. Making sure that you're not being vague with what's going on. you don't just tell them. Well, you have, there's a violation with things that you have on your porch. And it's like, Hey, we're not allowed to have grills on the porch specifically, and we're not supposed to have these, a propane tanks and things like that is making sure that they understand even exactly what the rules are and what exactly they're violating what rules they're violating because that also makes sure to them that that specific thing isn't being done And then if it is, for example, everything on a porch, let them know, Hey you, this is what you have on your porch right now, but there's nothing can be on there moving forward. Those are just the HOA rules and we all know how hos are with their rules and everything. But really. Having that conversation and explaining and holding onto your word is really the best thing to do when having to enforce fees those certain violations on the lease agreement.

Kassandra Taggart: 29:08

It's one of those things where I think you make a really good point by saying, you have to be clear if the HOA is intending for everything on that deck to be removed, don't just say, Hey, clean up the deck, say everything on that deck needs to be off, except for one chance. And be that clear because a lot of the problems that we have at least enforcement is being clear enough to where they understand so they can behave accordingly. And just because you think you explained yourself well doesn't mean that they understood what you've explained. I mean, it's just, communication goes both ways. It's just as much as being able to have the conversation as it is to be able to make sure that they comprehended the conversation to proceed from there. I'm going to wrap up with one final question for you. And it's a difficult question. No, I'm kidding. So what would you say is the final thought that you would want to give or share with our listeners today that that's that one tip or that one idea that comes to mind to help them be as good as you.

Dubi Rivera: 30:12

I would say always try to understand where your tenant is coming from. If you always try to take into consideration their thoughts and feelings, you're going to have a great. Relationship with that tenant. And hopefully a great tendency, but if you only think solely about how it will affect you and your situation and not also considering the tenants it can be a Rocky a Rocky relationship.

Kassandra Taggart: 30:40

I think that's an amazing advice. A lot of times people get so wrapped up in the emotions of their world and their management style and what they would do if they were the tenant. And it has nothing to do with that. It has everything has to do with, are we communicating? Are we honoring the contract? Are we holding people accountable? To the contracts and making it a business decision. Did we get as much information to be able to make up as this business decision and actually doing it? It's, it's not about you at all. This is business and you're not here to be me, not here to be hurtful, here to express your emotion. You're here to conduct business as a professional and get things done. So let's all make profit. Well, thank you so much listeners for listening in today. I'm with Doobie. She's an amazing skill with communicating tenants and keeping them on the same page with the landlord so we can push forward in our lives. Debbie is a valuable person to listen to. I hope that you save this podcast for the future. I do anticipate her coming back so we can talk about the depths of other conversations thank you