The older I get, the extra I dislike being a landlord. There’s an excessive amount of potential for disappointment, misunderstanding, or outright disagreeable moments. Once you’re coping with individuals and certainly one of your Most worthy property, the margin for frustration is excessive.
If you wish to be a profitable landlord—and never get run over—you have to set expectations clearly and implement them. In any other case, you’ll consistently really feel such as you’re letting somebody down or, worse, being taken benefit of.
This submit is a part of a collection chronicling my journey as a landlord since 2005. My aim is to offer readers a clearer image of what’s actually concerned when you’re contemplating turning into one your self. This newest expertise additionally underscores the worth of hiring a property supervisor: somebody emotionally faraway from the method who can deal with your property purely as a enterprise asset.
San Francisco’s Sizzling Rental Market
After 20 years of being a landlord, I’ve skilled all of the cycles. And proper now, the San Francisco rental market is robust. With residence costs close to all-time highs, mortgage charges nonetheless elevated, and the continued AI increase creating extra jobs, demand for leases appears to be rising.
Earlier this yr, my tenants of 5 years gave discover. That meant I had an opportunity to check the waters once more and re-rent my home. This time, the entire home to optimize our passive revenue, not simply the upstairs whereas conserving the downstairs empty. I listed it on Craigslist on a Tuesday and was instantly bombarded with curiosity.
By Saturday, I hosted two non-public showings for wonderful potential tenants. Each teams needed the place on the spot. One spouse was so excited she actually shouted: “We’ll take it! I need to transfer in proper now!” when she was leaving.
These weren’t flaky candidates both. They had been organized, enthusiastic, had nice jobs, and wonderful credit score. It was tough to decide on between them, so I requested every to submit their greatest provide. Inside 10 days, I had chosen the tenants, collected the deposit, and obtained the primary month’s hire.
Every little thing was shifting easily. Or so I believed.
Getting ready the Home for New Tenants
As a result of my spouse and I had been genuinely enthusiastic about this household, we went the additional mile to arrange the house. Over two weeks, we painted partitions and trim, patched and sanded uneven spots, scrubbed every part high to backside, and tackled an enormous quantity of yard work. It felt extra like we had been prepping the home on the market than for hire.
Our earlier upstairs tenants had been strong, however they uncared for the yard. So my youngsters and I rolled up our sleeves and set to work reseeding, trimming bushes, pulling weeds, and watering every part again to life. Doing property upkeep alongside my youngsters is one thing I plan to maintain up. It builds their work ethic, offers them hands-on information, and helps them recognize the worth of caring for what you personal. Working with them additionally makes me extra smitten by addressing points.
On high of that, as a result of the possible tenants needed to maneuver in as quickly as doable, I needed to work out an earlier exit with the present upstairs tenants. That meant negotiating a prorated hire, agreeing on a snug move-out date, and ensuring they returned the unit in its authentic situation. Not straightforward dealing with each side! In the long run, all of it got here collectively. I bought the brand new household in eight days forward of schedule. By move-in day, the home seemed recent, clear, and able to be loved.
There’s a singular satisfaction in handing over a property in pristine situation. It units the tone for the connection immediately. You hope the tenants will see the satisfaction of possession and reciprocate by caring for the place. And as a landlord, it’s additionally a psychological reset. You’re feeling good realizing the property is in nice form earlier than handing over the keys as soon as extra.
The Transfer-In Demeanor Shift
On move-in day, the husband arrived early for our walkthrough. Calm, well mannered, and well-prepared, he had scheduled out the day:
- Walkthrough with me at 10 a.m.
- Good friend arriving at 11 to assist unload a van of extra delicate gadgets the tenant introduced.
- Principal movers coming at 11:30 with a big truck.
Every little thing about him was orderly and respectful.
The spouse confirmed up later, round 11:15, clearly harassed from the packing and logistics at their outdated place. The enjoyment she’d proven when she shouted, “I need to transfer in proper now!” was nowhere to be discovered.
After I greeted her with a smile and a “whats up,” she barely seemed up. No massive deal, I informed myself—it is a enterprise transaction, not a friendship. Transferring is traumatic and rather a lot should have been on her thoughts.
I wrapped up the walkthrough, defined all of the nuances and upkeep recommendations on the home, handed over the keys, and wished them the very best.
The Shock Request
Every week later, I occurred to be driving by and noticed them outdoors working within the yard. This was encouraging. I pulled over to say “whats up,” and rapidly seize a sizzling tub stool and a few chlorine bottles I’d left in outside storage.
The husband was pleasant, asking how I used to be doing. However the spouse instantly hit me with:
“Hey, I’ve bought a query for you. Are you able to get some mulch and also you pay for it? There are some naked spots right here and particularly within the again.”
No “hello.” No “thanks for the clear yard” or “the home is nice.” Only a request.
Her tone caught me off guard. I anticipated some acknowledgment of the work we’d already finished. Or no less than how she was having fun with the place. As an alternative, I felt like an worker being given a directive, one thing I’m now not accustomed to after retiring in 2012. All these hours my youngsters and I had spent reseeding, trimming, and watering? Apparently meaningless or not ok to their requirements.
I muttered a noncommittal, “Possibly,” and left with a “goodbye” for good measure. I wanted time to consider her request after the lease was signed.
Setting Clear Expectations
I satisfaction myself on offering an important product for the hire individuals pay. That’s why I used to be just a little stunned by her request, and in addition why hiring a property supervisor helps with decreasing emotional attachment.
My lease—which I’ve been refining since 2005—is a number of pages lengthy and really clear. Nowhere does it say the owner should present mulch. In truth, it explicitly states tenants are accountable for sustaining the yard and vegetation.
Throughout the non-public exhibiting, they by no means talked about mulch. Throughout lease assessment and edits, mulch by no means got here up. Solely after signing did this “expectation” floor. Between signing the lease and shifting in, the mulch didn’t all of the sudden disappear on this brief time frame.
That is precisely why setting clear expectations is so essential. If one thing isn’t within the lease, it shouldn’t all of the sudden turn into a requirement.
The Slippery Slope Of Giving In
Right here’s the hazard: when you begin giving in to further requests, expectations balloon.
In case you purchase and unfold mulch, what’s subsequent—a Toto Washlet and new lighting fixtures at your expense? The record of needs will be limitless. As an illustration, my new tenants additionally requested me to cowl the price of customized paint they utilized in a downstairs workplace and bed room. I declined. The prevailing paint was completely fantastic. I had simply repainted a kind of rooms myself. Aesthetic upgrades fall squarely into the class of tenant bills.
Tenants are free to ask, however landlords want to guard themselves and are free to additionally say no. In case you oblige each request, you danger blurring the boundaries. Your position shifts from proprietor to on-call service supplier. That semi-passive revenue begins turning into lively revenue, which is what you need to keep away from.
And when your revenue margins are already squeezed by property taxes, mortgage curiosity, upkeep, and the occasional late hire, doing unpaid “extras” can tip your rental into unprofitability.
Worse than the cash is the psychological vitality drain. As soon as you identify your self as a landlord who at all times says sure, saying no later turns into a lot more durable. Bear in mind, as somebody in search of monetary independence, your property should be just right for you, not the opposite approach round.
Discovering A Compromise
After sleeping on it, I made a decision to supply a center floor. I emailed the husband—who had been well mannered {and professional} from the beginning—and informed him I’d reimburse as much as $150 for mulch. They might choose it up themselves and unfold it round. At roughly $9 a bag, that will cowl about 15 baggage after tax, which felt affordable.
This manner, I wasn’t setting the precedent of turning into their private landscaper, however I used to be nonetheless exhibiting some flexibility. To make issues simpler, I even informed them which retailer to go to and precisely the place to search out the mulch within the retailer. It was a small gesture, however I needed to begin the connection off on the correct foot with just a little give. Somewhat goodwill to start with can go a good distance over the course of a tenancy.
They accepted immediately and appeared genuinely grateful. Because it seems, at their final rental, the owner anticipated them to mulch the backyard each single yr, in order that they assumed that was commonplace.
I defined that I hadn’t observed the naked spots sufficient to make it a part of the lease, however since they introduced it up, I used to be fantastic with refreshing it each couple of years if wanted. I even urged they spray some Rock Glue to assist preserve the mulch in place and informed them I’d cowl the price of that too.
In the long run, what may have been a sticking level become a small win-win. They may get the spruced-up yard they needed, and I bought peace of thoughts realizing we’d began our landlord-tenant relationship with just a little cooperation as a substitute of battle. The $150 in mulch shouldn’t be an enormous deal in any respect. It is all about setting expectations and asking respectfully.
I’m assured they’ll develop into nice, caring tenants. In any case, nice tenants care in regards to the yard and curb enchantment, which is approach higher than not caring in any respect. At first, it’s at all times only a leap of religion. And I’ve bought religion that after 20 years of being a landlord, these new tenants shall be terrific.
Why Strict Guidelines Construct Higher Relationships
Suppose again to high school. Bear in mind the strict instructor who laid out guidelines from day one? At first, you thought she was harsh. However by the tip of the yr, she was your favourite instructor. Why? As a result of the foundations had been clear, truthful, and constant.
After three years of teaching boys’ highschool tennis, I’ve realized the significance of creating clear guidelines too. In case you don’t implement them with firmness, youngsters will rapidly check boundaries and disrespect your authority.
The identical precept applies right here. Clear guidelines create mutual respect. They only should be reviewed and understood by each events.
In case you’re a tenant: learn the lease fastidiously, ask questions earlier than signing, and make clear expectations upfront.
In case you’re a landlord: assessment the lease line by line, spotlight tenant obligations, and provides tenants a number of days to boost questions. Ask them if they’ve another issues that’s not within the lease. You have to be as thorough as doable. Preserve bettering upon your lease for subsequent time.
That small effort on the entrance finish can prevent huge frustration down the street.
Why I’m Decreasing My Landlord Publicity
Interacting with individuals will be draining, particularly when expectations don’t line up or the requests really feel unreasonable.
This is one other instance. My outdated tenants needed me to purchase three lighting fixtures they’d put in. I declined. I had already been versatile in letting them swap out the unique fixtures, so I informed them they may both go away their new ones behind or reinstall mine. They’d packed each my outdated curtains and lightweight figures in packing containers within the storage, they usually had been taking over area.
They weren’t thrilled with my reply after which requested me for the brand new tenant’s contact information to pitch them on shopping for the sunshine fixtures. I discovered the entire alternate draining over probably a couple of dollars. I by no means would have requested my landlord to buy lighting fixtures I selected for myself. Possibly it was a cultural distinction. However to me, it simply felt like one other reminder of how mismatched expectations can create pointless friction.
If I had merely caught to the foundations and mentioned no to swapping out the unique lighting fixtures, this battle would not have taken place. However that is what you typically get for making an attempt to be versatile and good.
Though proudly owning rental properties is without doubt one of the greatest methods to construct wealth and safe retirement, I’ve reached the purpose the place the fixed hassles outweigh the rewards. Every turnover requires managing departing tenants, dealing with an exit walkthrough the place harm at all times reveals up that they’ve “no thought” what occurred, discovering and vetting new tenants, getting ready the property, after which repeating the walkthrough course of. It’s a demanding cycle, and after years of managing it, I’ve determined sufficient is sufficient.
I am unable to wait to promote one other rental property in a few years, as by then, I’ll qualify for the tax-free exclusion rule as soon as extra.
Landlording Can Be Like Working A Company Job
One of many most important causes I left company America was attributable to individuals. Workplace politics, tough personalities, and fixed requests wore me down after 13 years. I did not like managing individuals both as I need extra individuals to be free to do as they please.
Being a landlord is commonly no totally different. Even with supposedly “good” tenants, points come up. That’s why, regardless that I’m nonetheless bullish long-term on San Francisco actual property, I accepted a preemptive provide in 2025 for my outdated main residence that was a rental for one yr.
I reinvested 100% of the proceeds into the S&P 500, particular person shares, Treasury bonds, and enterprise capital—investments that require zero individuals administration. Shifting semi-passive rental revenue into really passive investments has been a reduction.
When you FIRE, you may additionally determine you don’t need to handle rental properties both, for most of the identical causes you left your job within the first place.
Classes Discovered For Landlords
Listed below are the primary takeaways from this expertise:
- Set clear expectations upfront. Your lease is your rulebook. Don’t depend on verbal understandings because it opens your self as much as misunderstandings.
- Don’t change the phrases midstream. If it’s not within the lease, it’s elective, not necessary.
- Watch out with “extras.” When you begin saying sure, tenants might preserve asking for extra.
- Shield your margins. Bills creep rapidly; don’t let small favors flip into massive, ongoing obligations.
- Respect goes each methods. Kindness and courtesy matter. Tenants who deal with you effectively deserve extra flexibility than those that don’t. Use your emotional intelligence to make life simpler for each side.
In my subsequent lease settlement, I plan to spell out extra particulars round exterior upkeep, make clear that the property is rented “as is,” and specify that tenants might make enhancements or aesthetic modifications solely with prior approval and at their very own expense.
The trail to constructing a livable passive revenue stream for monetary freedom isn’t straightforward. The secret’s to at all times be taught from every expertise so the subsequent one turns into just a little higher.
Let’s All Perceive And Observe The Lease
On the finish of the day, each landlords and tenants need a optimistic expertise. Tenants need worth for what they pay. Landlords need tenants who take care of the property and are self-sufficient. Neither occasion needs to maintain going forwards and backwards with one another throughout the complete time of keep.
This steadiness is achievable, however solely when each side clearly perceive and observe the lease. With out expectations, frustration grows. With them, the connection has an actual likelihood of succeeding.
Landlords, have you ever ever had tenants ask for issues that went past the lease? How did you deal with it—did you accommodate, push again, or discover a center floor? And tenants, I’d love to listen to your aspect too. Have you ever ever satisfied a landlord to go above and past what was in your lease? If that’s the case, how did you pull it off?
On the finish of the day, I believe setting expectations is the muse of a clean landlord-tenant relationship. However I’m curious—how essential do you assume it truly is, and the place do you draw the road?
Spend money on Actual Property, With out the Complications
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Fundrise focuses on build-to-rent residential and business properties in additional reasonably priced elements of the nation. They deal with the acquisitions, tenants, and property administration—so you possibly can sit again and concentrate on the elements of life you really get pleasure from.
I’ve personally invested over $450,000 throughout a number of Fundrise funds and a number of other accounts, they usually’ve been a long-time sponsor of Monetary Samurai. With the Fed reducing charges once more and three years of underbuilding attributable to excessive financing prices, I anticipate to see continued upward strain on rents within the years forward.
