This is the story of two landlords who got into big trouble.
Why did they cut out the floor supports of their own six-unit, three-story apartment building, for which they had paid $995,000?
Why would they put themselves into a position to get arrested and face charges of conspiracy, burglary and stalking?
These landlords made at least 5 major mistakes with the San Francisco property. All the trouble and pain, both for them and the tenants, could have been avoided had they followed very simple basic landlording advice.
1. Buy a property you can control
You need to know the laws and rules of your local area where the property is located. Local laws can vary immensely from city to city.
Don’t even try to fight rent controls such as the ones in San Francisco. That means you will not be able to raise the rents as you need to. There are too many lucrative properties in more landlord friendly areas to invest in.
2. Have a legal working plan for getting inherited tenants out
Yes, they do come with the property. For better or for worse, if they have a lease, they will be your tenants until the lease runs out. If needed, get your lawyer to read over the leases so you’ll know exactly what the tenants’ rights- and yours- are.
You can not force tenants out by scaring them, changing the locks, cutting the floor supports, etc. That’s illegal.
Bank of America has a very good plan for removing tenants from the Countrywide properties they have just taken over. Pay the tenants to leave. Read Bank of America plans to help 265,000 avoid foreclosure
3. Never invade your tenants’ privacy
Tenants’ privacy is strictly protected by law in most states. Don’t violate that. You’ll be asking for real trouble if you do. Besides, it only makes a bad situation worse.
These landlords should not have gone into the tenants’ apartments as they allegedly did, without notifying the tenants first.
Keep in mind, tenants will defend their tiny turfs all the way, if needed.
4. Avoid criminal activity
The landlords were accused of some pretty serious crimes. Always avoid the illegal and immoral behaviors. Problems can be solved legally and morally without venturing into this murky territory that will only cost you money and possibly jail time.
Remember, tenants can get very resourceful when it comes to finding legal help. That’s because many people still view landlords with a measure of skepticism. They’ll take the tenants’ sides- ‘just because”. Don’t give them a ready made crusade.
5. Don’t become too obsessed with a property
I know, they spent a million dollars, give or take a few bucks.
Yes, but all properties are only material things. Those million dollars could have even been better invested in CD’s, or just about anything else but this property. Why? Because it brought out the worst in these landlords.
I couldn’t help thinking how much energy and time went into this turf war that in the end was a losing proposition for the landlords.
Get out of properties like this apartment building and put your money in easier properties. Properties should not be this hard to manage. Period.
We’ve covered five of the biggest mistakes these over the top landlords made. But their biggest mistake of all was in not doing the proper due diligence. They should have been able to see this train wreck coming.
Always get as many facts as you can ahead of time. Base your buying decisions on good common sense and sound business and you’ll do well in real estate.
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