Real Estate Investing is a business and it should be run like one.  One of the biggest mistakes I see investors make is getting personal with the homes and or tenants.  When doing rehabs they do costly unnecessary upgrades as if they were going to live in the home themselves adding a tremendous and unnecessary amount to the rehab costs.

When dealing with the tenants they allow emotions and personal feelings to get in the way of running a business.   Take the personal element out by representing yourself as an employee of a management company not as the property owner or the management company owner.  You don’t make the rules you just follow them, you have a job to do or you will be fired.  The owner is an investment group (this will hold true if you hold the property in an LLC, the group just may be your family) that has contracted with the company you are employed with.  When a 7 Day Notice is sent out and the tenant calls me, I explain it was sent out by the legal department and that if they do not pay their rent, late fees and possible court costs will be applied.  If they don’t pay the rent within the time allotted, they will have to go to court.  If they ask to talk to the owner directly, I tell them to go to court and they can speak to the attorney.  If they do not want to go to court, they need to pay their rent and that is the only two options they have.  This further isolates me because I did not send it out and I am not in court.

When managing properties it is important to be consistent on policy and procedures.  This sends a strong “all business” message to your tenants.  Invoices for each month are sent out on the 20^th day of the previous month.   Seven day notices are used as late notices and sent out on the 6^th day of each month that the rent is not paid in full.  Allowing one day for mail delivery; this would put you to the middle of the month to receive payment before filing a summons and complaint.   Many times I see landlords trying to work out payment arrangements with tenants for months only to have to evict them and have several months of rents due.

I have heard just about every story there is as to why the rent is not paid.  Doing it the way I describe herein has reduced the number of stories I receive due to the fact the tenants know the decision is not mine and their fate lies in them paying their rent on time.

Chris Yatooma, President

Real Estate Investors Association of Oakland