Landlord and tenant relationships
The relationship between the landlord and tenant can perhaps be the most significant area in property management, but can sometimes be overlooked and underestimated.
In fact, in North America, and even in a highly tolerable Canada, the landlord-tenant law is a serious contract.
The first reason this is so important is the legal and larger financial concerns. Even many residential real estate investors seriously underestimate the risks of daily interaction. Overstepping boundaries cannot just diminish returns and cash flow, but can lead to incredibly expensive lawsuits. Damages to both residential and business tenants can far exceed lost rent and income, and may even extend to compensating extended family members for emotional and psychological distress. This could easily wind up bankrupting many small landlords far faster than they can imagine.
Second, consider the reputation risk and subpar performance. It doesn’t matter how intelligent and experienced an individual landlord may be, they generally don’t have the operational efficiency and capabilities of a professional management firm with a full-time staff. Along with that comes expertise in dealing with tenants and understanding how to achieve top performance from your assets.
Building positive landlord and tenant relationships applies equally to all types of real estate investment, from single family home rentals, multifamily apartments to shopping plazas. Weigh the pros and cons and do the research to help find the investment opportunity which offers the type of management right for you.