Wednesday, July 20, 2011

Tenant 101

Want to have less hassles with your landlord?  Try seeing things from his perspective for a change.

Many kids tend to view landlords as "assholes" who "just want all their money" - and yet they don't notice that the landlord isn't exactly the richest dude in the world.  And they wonder why, just because they have 20 people over at their house for a kegger.  Or a couple of windows got broken, and he gets upset. Why is that?  Must be an asshole, right?

But the reality of it is, most landlords are pretty thinly financed.   The income from your rent pays a whole host of expenses - the mortgage, the property taxes, the insurance, the utilities, and the like.  And if you stop paying rent - or damage the property - the landlord goes from making a small profit to having a huge loss.

Why is this the case?  Well, in most markets, Real Estate is pretty competitive.  If one landlord is making a boatload of money in rents, others will jump into the market and buy up housing and convert it to rental properties, or build rental properties to rent.  And this process continues until the profit margins are no longer that attractive.  And this, by the way, happens in most businesses, which is why free enterprise and capitalism work so well - compared to the alternatives!

And yes, there is a lot of Real Estate available - more than you think.  For example, at Syracuse University, where I went to school, there is a lot of run-down, abandoned, or underutilized real estate near the university.  If landlords who rented to students were making such a killing, someone would jump into that market, buying up the cheap Real Estate there and renting it.  But they don't - because the market is pretty saturated as it is.

So your typical landlord is not making a lot of dough.  Sure, over many many years, he may collect on the property if he sells it.  But he is gambling on the market going up - and as we have seen, markets can go down.   Even in good times in "hot" Real Estate markets, some neighborhoods, cities, or areas may actually depress in price.  If a neighborhood goes ghetto, prices drop.  And so much for big profits and hello huge losses.

So in most cases the rent you pay barely covers operating expenses - and the landlord is risking money, time, and his credit rating (as well as bankruptcy) on the property appreciating in value.  And what can depreciate a property in value?  Crummy tenants.

Living on your own is a chance to live as an adult.   And as an adult, we all have to grow up.   Unfortunately, in this country, "kids" of 25 or even 30 are treated as children - and act accordingly.   So you see a "kid" of 25 wearing kiddie clothes and holding a skateboard and talking in teenage slang, "Wassup dude!  Let's smoke some 420 and have a kegger at the pad!   S'cool!"

Or whatever.  It is freaking embarrassing.

Not so long ago in this country, a person that age would be married, have children, and have a well-paying job, wear a suit and tie, drive a car to work (not one with a coffee can muffler, either) and probably be buying their second house.   But today?  Kids remain pre-teens until well after college - if they ever move out of their parents' basements.

Not so long before that, a "kid" of 20 would be piloting a 4-engine bomber over Europe - with the lives of 10 men resting in his hands.  People had a lot more responsibility in those days and took it seriously.

And not so long before then, a "kid" of 16 might be married and headed West with his new bride, in a covered wagon, ready to homestead a raw patch of land.

And kids today?  At age 30 they are hardly more mature than the 12-year-olds of Mark Twain's day.

And yet, social responsibility remains important, not only for our society at large, but on a personal level.  Today, computers track all aspects of our lives - and we often willingly give up this information to the online world.  6 million college students closed their Facebook accounts last May.   Why?  Because in a job market where 1 in 10 get a job interview and of those, 1 in 10 get hired, it doesn't pay to have the image of "party boy" stamped on your resume.

And in this day and age, when hiring and firing someone is a big deal - you want to make sure they won't sue you, that they might actually work, and that they won't bring their gun to work - employers do background checks on people - they ask you to pee in a cup, and they search your name online and on Facebook - or hire investigators to do this for them.

Sounds unfair?  Probably is.   But as a young naive liberal college student, you probably thought putting onerous work rules onto employers (those evil big corporations you are now begging for a job from) was a super-keen peachy idea.   After all, why should they be allowed to fire someone just because they never show up for work and steal from the company?   And if they do fire them, they can't even give out a bad recommendation, either.

So, you asked for this sort of employment environment - this is what you get.   Employers who are paranoid about hiring anyone at all because it costs so darn much and the risks are so great.   The chickens have come home to roost, my friend, and if you want to blame someone for your job going overseas or no one hiring, take a good look in the mirror and then slap yourself (hard) for all the silly-assed shit you said in college.

But getting back to being a good tenant.  Yes, employers also check your credit ratings these days.  If you are in debt to your eyeballs and show unpaid or late rent - or an eviction - on your record, they ain't gonna hire you.  You've telegraphed what a worthless and unreliable scumbag you are - so don't act all surprised if they don't hire you.

And yes, all that stuff is available on a computer.   And yes, they may ask for references, including that from a landlord.   And if the landlord says you were a noisy S.O.B. who annoyed the tenants and paid the rent late, well, they probably have a reasonable expectation that you will be equally as annoying in the workplace.

As a tenant, you have the right to quiet enjoyment of the property, nothing more.   And other other tenants in adjacent apartments (or buildings) have similar rights.   So cranking your stereo to full volume just isn't in the bag.   Parking on the lawn isn't funny.  Letting your friends park in someone Else's parking space and then screaming at them that they are "Nazi Assholes" when they ask you to move the car, just isn't cool.   And no, chances are the lady downstairs is not a "Nazi Asshole" but a single Mom who came home tired from work and doesn't want to park her car around the block, instead of her assigned space, just so your friends could come over and smoke bong hits (and your friends live three blocks away, what's up with that?  They can't walk?).

But, all of what I am saying is in vain.  Most college-age kids, particularly males, have an incredible sense of entitlement these days, and the first thing they feel entitled to is one big continuous party.  And many of these kids - often middle-class and upper-middle-class kids - get their normative cues from their peers and act out these college fantasies, with predictable results.

College can be a great opportunity - and given what it costs, it should be viewed as one.  Each hour of class time is costing you and/or your parents well over $100.  Don't squander it.  And College is a good place to build up your credit rating - not buy getting a credit card and running it up to the max at the Aeropostal store, but by not spending money but rather learning on how to live on less.   Every dollar in student loans you take out is a mortgage on your career.

Today, more than ever, you have to view these four years of college as a pipeline to a job.  You don't have to do everything perfectly, but you just have to avoid making really stupid mistakes.  Getting shitfaced all day long and getting C's and D's is a stupid mistake.   Putting up pictures of you puking on your Facebook page is a similar mistake.   Running up credit card debt and having a credit report that shows delinquent payments and a legal history that shows evictions, arrests, and the like, is basically going to make you unemployable.  There are far too many other kids out there who don't have these handicaps.

Unfair?  Perhaps.   When I was in school, youthful indiscretions were overlooked.  Criminal records and financial records were rarely checked, if ever.  Whether you were a party boy or not usually didn't matter with regards to whether you got hired.  Often, just being from the same fraternity as your boss got you in.   Today, that sort of thing is a lot harder to do.  Companies have to hire based on performance.   There is less room, if any, for slackers.

So, being a good tenant is something that is in your best interests as well.  Few, if any, landlords are "assholes" as is often alleged by tenants.  Usually, if you scratch the surface of such stories, you find a history of late rent payments, various parking violations, damage to the rental unit, complaints by other tenants, police visits, vandalism, etc.  The asshole is the tenant, not the landlord.

And if you don't like a landlord - move out.  Most leases are for a year or less, so if you don't like a location, find another.  Ahhh.... but there's the rub.   Once you've decided to become a problem tenant, no other landlord will have you - and this applies to older people who are out of college as well.

Looking back on my years as a renter, I got along with my landlords fairly well.  The only times I had any troubles with the landlord, they were usually troubles of my own making - playing music too loudly, or my friends parking in a neighbor's designated space - that sort of thing.  Very rarely did a landlord instigate trouble merely for the heck of it.   Vacancy kills, and an unrented unit is a unit not generating income.   You want good tenants to be happy - the key words here being good tenants - and a smart landlord doesn't start things with a tenant without reason.

Bad tenants, on the other hand, are a nightmare.  They damage the property, they never pay their rent on time - if at all - and they annoy the other neighbors.  The best solution to avoid tenant problems, from a landlord perspective, is not to take them on at all.   And when a prospective tenant comes to you telling you what an "asshole" the previous landlord was, well, he knows the score on that.