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 one in all your most dear belongings, the margin for frustration is excessive.
If you wish to be a profitable landlord—and never get run over—you might want to set expectations clearly and implement them. In any other case, you’ll continuously really feel such as you’re letting somebody down or, worse, being taken benefit of.
This publish is a part of a collection chronicling my journey as a landlord since 2005. My objective 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 powerful. With dwelling costs close to all-time highs, mortgage charges nonetheless elevated, and the continuing AI growth creating extra jobs, demand for leases appears to be growing.
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 earnings, not simply the upstairs whereas retaining the downstairs empty. I listed it on Craigslist on a Tuesday and was instantly bombarded with curiosity.
By Saturday, I hosted two personal 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 troublesome to decide on between them, so I requested every to submit their finest provide. Inside 10 days, I had chosen the tenants, collected the deposit, and acquired the primary month’s hire.
Every part was shifting easily. Or so I assumed.
Making 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 organize the house. Over two weeks, we painted partitions and trim, patched and sanded uneven spots, scrubbed the whole lot prime to backside, and tackled a large 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 children and I rolled up our sleeves and set to work reseeding, trimming bushes, pulling weeds, and watering the whole lot again to life. Doing property upkeep alongside my children is one thing I plan to maintain up. It builds their work ethic, provides them hands-on data, and helps them respect the worth of caring for what you personal. Working with them additionally makes me extra smitten by addressing points.
On prime of that, as a result of the possible tenants needed to maneuver in as quickly as attainable, 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 either side! In the long run, all of it got here collectively. I obtained the brand new household in eight days forward of schedule. By move-in day, the home appeared 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 understanding 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.
- Pal 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 part 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.
Once I greeted her with a smile and a “hey,” she barely appeared up. No large deal, I advised myself—it is a enterprise transaction, not a friendship. Shifting is hectic and rather a lot will need to have been on her thoughts.
I wrapped up the walkthrough, defined all of the nuances and upkeep tips on the home, handed over the keys, and wished them one of the best.
The Shock Request
Every week later, I occurred to be driving by and noticed them exterior working within the yard. This was encouraging. I pulled over to say “hey,” and rapidly seize a scorching 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 obtained 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.” No “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 not 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 not accustomed to after retiring in 2012. All these hours my children and I had spent reseeding, trimming, and watering? Apparently meaningless or not adequate to their requirements.
I muttered a noncommittal, “Perhaps,” 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 incredible product for the hire individuals pay. That’s why I used to be somewhat shocked by her request, and likewise why hiring a property supervisor helps with lowering 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. The truth is, it explicitly states tenants are accountable for sustaining the yard and vegetation.
In the course of the personal displaying, they by no means talked about mulch. Throughout lease evaluation 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 out of the blue disappear and this brief time period.
That is precisely why setting clear expectations is so essential. If one thing isn’t within the lease, it shouldn’t out of the blue develop 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 the event you purchase and unfold mulch, what’s subsequent—a Toto Washlet and new lighting fixtures at your expense? The listing of desires could be countless. For example, 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 positive. 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 the event you oblige each request, you threat blurring the boundaries. Your function shifts from proprietor to on-call service supplier. That semi-passive earnings begins turning into energetic earnings, 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 determine your self as a landlord who all the time says sure, saying no later turns into a lot tougher. Keep in mind, as somebody in search of monetary independence, your belongings should be just right for you, not the opposite manner 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 advised him I’d reimburse as much as $150 for mulch. They may decide it up themselves and unfold it round. At roughly $10 a bag, that might cowl about 15–16 baggage, which felt cheap.
This fashion, I wasn’t setting the precedent of turning into their private landscaper, however I used to be nonetheless displaying some flexibility. To make issues simpler, I even advised 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. Slightly goodwill at first can go a great 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 customary.
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 positive with refreshing it each couple of years if wanted. I even prompt they spray some Rock Glue to assist preserve the mulch in place and advised them I’d cowl the price of that too.
In the long run, what may have been a sticking level changed into a small win-win. They are going to get the spruced-up yard they needed, and I obtained peace of thoughts understanding we’d began our landlord-tenant relationship with somewhat cooperation as an alternative of battle.
I’m assured they’ll turn into nice, caring tenants. To start with, it’s all the time only a leap of religion.
Why Strict Guidelines Construct Higher Relationships
Suppose again to high school. Keep 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 principles had been clear, truthful, and constant.
After three years of teaching boys’ highschool tennis, I’ve realized the significance of building clear guidelines. In the event you don’t implement them with firmness, youngsters will rapidly take a look at 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 the event you’re a tenant: learn the lease fastidiously, ask questions earlier than signing, and make clear expectations upfront.
In the event you’re a landlord: evaluation the lease line by line, spotlight tenant duties, and provides tenants a number of days to boost questions. Ask them if they’ve some other considerations that isn’t within the lease. You should be as thorough as attainable. Hold enhancing upon your lease for subsequent time.
That small effort on the entrance finish can prevent monumental frustration down the highway.
Why I’m Lowering My Landlord Publicity
Interacting with individuals could be draining, particularly when expectations don’t line up or the requests really feel unreasonable.
Take my outdated tenants, for instance. They needed me to purchase three lighting fixtures that they had put in. I declined. I had already been versatile in letting them swap out the unique fixtures, so I advised them they may both depart their new ones behind or reinstall mine.
They weren’t thrilled with that reply after which requested me for the brand new tenant’s contact data to pitch them on shopping for the sunshine fixtures. I discovered the entire trade draining over a couple of bucks. I by no means would have requested my landlord to buy lighting fixtures I selected for myself. Perhaps 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 principles and mentioned no to swapping out the unique lighting fixtures, this battle would not have taken place. However that is what you generally get for attempting to be versatile and good.
Though proudly owning rental properties is among the finest 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 all the time exhibits up that they’ve “no thought” what occurred, discovering and vetting new tenants, making 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 can not 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 principal causes I left company America was attributable to individuals. Workplace politics, troublesome personalities, and fixed requests wore me down after 13 years. I did not like managing individuals both.
Being a landlord is usually no completely different. Even with supposedly “excellent” 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 major 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 earnings into actually passive investments has been a aid.
When you FIRE, you may also resolve you don’t need to handle rental properties, for lots of the similar causes you left your job within the first place.
Classes Realized For Landlords
Listed here 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 optionally available, 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 large, 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 either 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 earnings stream isn’t straightforward. The secret’s to all the time be taught from every expertise so the following one turns into somewhat 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 celebration desires to maintain going backwards and forwards with one another throughout your entire time of keep.
This stability is achievable, however solely when either 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 facet 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 inspiration of a clean landlord-tenant relationship. However I’m curious—how essential do you suppose it truly is, and the place do you draw the road?
Spend money on Actual Property, With out the Complications
Don’t need to cope with tenants, late-night upkeep calls, or chasing hire checks—however nonetheless need publicity to actual property? Take a look at Fundrise. With over $3 billion in belongings beneath administration and a minimal funding of simply $10,
Fundrise focuses on build-to-rent residential and industrial properties in additional inexpensive elements of the nation. They deal with the acquisitions, tenants, and property administration—so you’ll be able to sit again and give attention to the elements of life you really get pleasure from.
I’ve personally invested over $500,000 throughout a number of Fundrise funds and several other accounts, they usually’ve been a long-time sponsor of Monetary Samurai. With the Fed chopping charges once more and three years of underbuilding attributable to excessive financing prices, I anticipate to see continued upward stress on rents within the years forward.
