Episode 31: The "Rules" As a Landlord, Part 2
Summary
As a landlord, the rules are many! Today's episode is part 2 of the "rules" as a landlord. You might recall the part 1 rules, as episode 1 WAY back when! Today we talk about the power of giving and receiving the keys to a unit, the role of a landlord as a lender, and knowing that your rental business is a BUSINESS (and not a charity). As we continue to expand on stellar landlording, today's episode expands on the rules, part 2!
Listen to full episode :
Full Episode Transcription
Welcome to My Life as a Landlord, where we untangle all things housing and educate the curious. If
you're looking for some entertainment with some honest, awkward conversations, you've come to the
right show. I'm your host, Dr. Jennifer Salisbury. This is my life as a landlord. Welcome to it.
Well, hello there. Welcome to my life as a Landlord. I'm Dr. Anne, your host, your guru, your educator. This is
episode number 31 of My Life as a Landlord. And today is all about landlording perspective. Specifically
the rules as a landlord. Part two. Most of the listeners out there inherently go to The Rules of a Landlord
Part One. And so, by far, that is the most listened to podcast in my channel, which is kind of cool. But I
thought, how can I improve this whole topic? This rules as a landlord. The landlord perspective. And so I
decided I'd put together a Rules of the Landlord part Two. Now, for those of you who are new to the
podcast, first of all, this is the first episode that I am actually also simultaneously recording, which is
kind of cool. So if you want to watch me record this, the YouTube channel is, you guessed it, my Life as
a Landlord. And this is the first video that I will be simultaneously recording and videoing. It's kind of
weird because you're watching me as I'm talking, but that's okay. Go to the channel and check it out. Go
to YouTube. Last week, I talked about other Salisbury adventures. I spoke about business in a box. And
next week I'll be talking about something on a tenant perspective. And we do have five rotating,
predictable topics. We start with landlord stuff, then tenancy issues real estate development, then real
estate investment, which is all about money, and then other Salisbury adventures. And then for fun, I
always try to come up with something that kind of comes out of left field, and I call that a podcast extra.
For example, with interest rates rising in North America, both US. And Canada. I was approached by
several people last week to do a podcast about interest rates, about the rising interest rates and how that's
really pinching a lot of landlords. And as a result, it's now going to be pinching a lot of tenants
unexpectedly. So I've got a podcast extra in the queue here. In the next few days, I'll be recording that,
and then my crew will throw it in the mix. So you don't have to wait five or six or seven weeks, because I
do record these podcasts quite a few at a time. So, again, I'm really hoping that we can provide value to
you through these podcasts. All right, let's get to it. Rules as a Landlord, part two. Now, let's just review
what the rules of a Landlord part one was. If you haven't listened to this podcast, I highly recommend
you do. I'm just going to hit the high points here. Rule number one, you've got to know your local
tenancy code, your local landlord tenant law, residential Tenancy act, whatever the name of it is in your
state or province. You've got to know the rules of this game that you are playing. Rule number two, we
don't chase people for money. I actually got a lot of questions about that, and I did a separate podcast just
on how we don't chase people for money. And rule number three, we treat people how we want to be
treated. That's pretty simple for us. So that was the rules part one. So let's go to the rules part two. How
could I improve on that? Mike and I really, really scratched our heads and tried to come up with
something really profound. Again, we want to try to provide immediate value to you. Okay? So here we
go. Here's the three points for Rules as a Landlord, part two. Number one, when the tenant takes the keys,
the game changes all. It. Subsequently, when you get the keys back, the game changes. The keys are the
trick to this. The keys are everything. As a landlord number two, the landlord is a lender. I don't see any
other way that you can say it and we'll talk more about that. The landlord is a lender. And rule number
three, your rentals are a business, not a charity. That sounds really gold. Unfortunately, numbers don't
care about any other things other than logic and speaking in facts. All right, let me expand on all of these.
Number one, keys are everything. Let's talk about this. When the tenant takes the keys, the entire game
changes. Once you give permission to that tenant to control the unit, sometimes not even the keys, which
is even crazier, the game changes. You've given them control of that space legally. Now you have to
request permission to enter. You can't just go barging in. You have to give them proper notice to enter.
And to do all of this, you must know the rules. But let's back it up. You've got to screen your tenants
properly so that you know who you're giving your keys to. Who is this person? I'm not even going to
go into more of that because the keys change everything and then I'm going to flip it on its head here.
Let's talk about when a tenant departs. Let's talk about when a tenant departs and it's really not fun and
it's really nasty. And you're talking eviction or eviction for cause, eviction for unpaid rent, whatever
stressful event is going on. The goal of an eviction is an empty unit. The goal is to get the keys back,
to get that control back. The whole game changes with the keys. I see a ton of people on Facebook,
LinkedIn, they're talking about, and all these Facebook groups, they're talking about how they never got
unpaid rent back from their tenant, or all these damages or security deposit or all the different money
aspects that they're trying to get back. And that's fine. That's a separate fight, folks. That's a separate
fight. The whole trick is you want to get back control of the unit. Until you have control of the unit, you
can't do anything. They're not going to pay you. Well, they very likely are not going to pay you anyway,
but they're certainly not going to pay you while they're still sitting there. Well, anyway, I may be wrong.
If you're a landlord out there and this is happen where you're trying to evict someone and they're trying to
pay you, please throw something up on the Facebook group. Or now I've even got the YouTube channel,
you can throw it up there as well. But keep in mind, possession is control. Without that, you cannot
regroup or recover or restart. You have to have possession of the unit first. You've got to have the keys
back, and then you've got to be very careful of who you give the keys to. Yeah. Wow. I don't know
how much more I can say about that, but you've got to have control of who you give your keys to. Okay?
So that's the first thing. When the tenant takes the keys, the game changes completely. You got to
understand what that means. All right. Number two, the landlord is a lender. Okay, let me paint this
picture before I start explaining about landlording and all that. Let's talk about this scenario. Let's talk
about you're looking for a new car and you want to finance it. What kinds of things would the bank or the
car dealer, whoever is financing it, what kind of things would they need from you if they decide to lend
to you? Right. They're going to want a pay stub if you're in the US. They're going to want a W two if
you're in Canada, they're going to want a T four or T five if you're self employed. They're going to want
tax returns. Very likely, they're going to want to know information about your home or your mortgage.
Very likely they're going to want to pull your credit. So compare the value of the car and the payment
that that car would result in to the value of the home, and then compare that car payment to a rent
payment. So. It, which is 1s more, let's call it invasive, a car or a home. So you've got to be careful here,
because people seem to have no issue when they go in to buy a car and finance that car. They'll turn on
everything and anything to get that car financed. But with a lender, with a landlord, require Westing
credit and all kinds of things, including IDs, pay stubs, proof of income, credit, all these things, it seems
that people push back quite a bit more. I'm not sure why that is. I'm actually kind of confounded at that,
because the landlord is providing the space that is safe, quite comfortable to this potential tenant in
exchange for the tenant's promise that they're going to pay the rent and they're going to behave according
to the lease. So wouldn't the landlord's requirements for lending be as much or more stringent than,
say, the car dealer or the bank who's financing the car? Okay, that's the first thing for me for
Landlord is a Lender Future podcast. I'm going to do a deep dive into tenant screening. I've mentioned
before that there's going to be a membership aspect, a paid area in the website that is deep dives for both
newbie landlords and landlords that are in a pickle. So I've got two aspects landlord new be landlords and
pickle landlords. But again, landlord is a lender. I'm going to do much more of that. So the lender
exchanges temporary control of a lockable dwelling in exchange for the tenant's promise to pay. I think I
said this, that promise is written and it's called a lease. And because Landlord is a lender, tenant
screening is absolutely vital. And that's why I'm going to do a super deep dive on tenant screening. 1s
Future coming. Okay, let's go to the next one. Rule number three, rentals are a business, not a charity.
Okay, this sounds heartless, and I'm going to tell you that Mike and I have given chances to a lot of
people and we've been burned. And we've also give chances to people who have pulled them selves out
and proved us right in empowering them. But as a landlord, and those of you who are pickle landlords
and you're already in rentals and you understand, you're going to get a lot of stories of why people need
housing, you're going to get a lot of sob stories you're going to get of this that I have to be out in two
days kind of a thing. And. Well, I get it. I absolutely get it. I mean, I've got rentals available right now
and it's heartbreaking the stories that I hear, but I've also got to make sure that whoever I rent to can
qualify to pay the rent and that 1s there's not too many people or beings in that unit and so they still have
to qualify. It has to be a mutual thing. And then, oh, by the way, like, for example, I just got to a tenancy
application from someone who has health problems and they cannot be around anyone that's smoking at
all. Well, the vacancy they have applied for includes a deck that has nothing but smokers around them. Is
that going to work? I don't know. I'm not sure. So we'll have to see. We'll have to see. That's the answer,
but I suspect that's not going to be a good fit. But all I know is that rentals are business and that business
does not start with the tenant telling a story. It starts with the landlord saying, here is my requirements for
rentals, this is what I require, this is what I need, and then sticking to it. And when you start making
accommodations, you're going to find out that the accommodations will backfire. Almost definitely they
will backfire. Something will happen and something won't get paid. Or you said I could, or hey, I'm your
friend, I'm your family member. It is a little bit painful here, but I always warn friends and family, friends
and family who are listening, you'll laugh. When I rent to friends and family, I say very specifically,
when you are entering my business as a tenant, you get zero preferential treatment. Zero. And of course,
that's the military officer in me coming out. I seek facts, I seek people to qualify as tenants. And then we
try to make sure that the space that they're qualifying for fits for them. So do we require a partial
application for a showing? Yes. Do I require IDs and pay stubs and all that stuff to get the showing? No,
I don't. But I have to have at least a peek at who these people are so that I'm not wasting my time. 1s I
when I first started growing up as a landlord in BC. There was a lot of showings, and there were deal
breakers at the showings going, oh, I didn't realize it only had two bedrooms, or, oh, I didn't realize there
was only this, or there was no bathtub. Okay, lots of lessons learned here. And 1s we don't schedule
showings without at least some kind of preliminary application submitted. They can tell their story. They
can tell us their need. They can tell us everything through that application. But trying to get me on the
phone or cornering me at the grocery store and telling me the story, that ain't the way to get it. Not into
my business anyway. Here's where we're at. Summary of the three points. The keys, possession of the
unit. The keys to the unit is everything. The game changes when you hand the keys to the tenants. The
game changes back when you get the keys back from the tenant. Possession is everything. Number two,
the landlord is a lender. You've got to treat it that way. Many people are not being serious about this
lending aspect to these tenants. You've got to make sure that you are keen, because as a landlord, all my
landlords out there, you are lenders. And then three, your business is not a charity. It is a business.
You've got to run it properly. Okay? So your call to action here we go. Talked a lot about keys. Guess
what? Guess what the call to action is. How organized are your keys? Are they labeled and easy to find?
Are they dumped in a drawer, scattered, not labeled. No idea what key goes to what. 1s So here's your
call to action. My landlords out there organize your keys. If you don't organize your keys, you're going to
be paying for a lot of locksmith time, or you're going to be paying your handyman to either rekey or
change deadbolts or whatever. Especially if you have multiple units or multiple properties or both, like I
have. And if we don't have keys under control, things get really hairy really quickly. And key control is
really ideal. Absolutely. It's adamant. You've got to do it. Okay. Let me know your comments or your
questions on our Facebook group for My Life as a Landlord. Now I've got a YouTube channel for my life
as a landlord. Remember, I create my podcasts out of questions and comments that I can map out and
provide immediate value for you. Join me. Next week's topic is a tenant perspective. This is episode
number 32 coming up. Help. My landlord forgot about me. Oh my. That sounds intriguing. I will see you
next Saturday. See you there.
Thank you for joining us this week. To view the complete show notes and
all the links mentioned in today's episode, visit our website at www.mylifeasalandlord.com. If you're
looking for educational resources for getting into real estate, investing, becoming a landlord, or even a
better tenant, then I have a page on my website to get you started looking for a solution to the pickle that
you're in. I have suggestions for that too. You can throw your situation on my Facebook group, My Life
as a Landlord, and let our community help you with solutions. Also, before you go, make sure you
subscribe to the podcast so you can receive new episodes right when they're released. You can either
subscribe right now in the app you're listening to this podcast on, or you can sign up at www.
mylifeasalandlord.com. Thank you again for joining me, Dr. Jennifer Salisbury, in this episode of My
Life as a Landlord. I'll see you next time.