CEO and Founder of L.A. Property Management Group and Crown Commercial Property Management.
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During this period of uncertainty and struggle, amid danger and misinformation, the last thing we should do as a people is to assume the worst about each other. Crises like the current pandemic inevitably divide people to some extent — and this one divides us physically from one another — but when we rigidly refuse to give the benefit of the doubt to people in circumstances that are different from our own, we make healing all the more difficult. In property management terms, I’m talking specifically about the rise of an “us versus them” mentality between landlords and tenants.
Let’s start with landlords and their misconceptions about tenants. I know how these misconceptions can form because I’ve been guilty of holding them myself. Covid-19 brought about a halt to evictions, a measure to protect those whose ability to pay rent had been eliminated by the virus or the shelter-in-place orders put in place to contain it. And while mayors and governors sounded magnanimous announcing this in televised speeches, many of them glossed over the fact that neither city nor state governments had granted any rent forgiveness at all, meaning rent was still owed in full in the long term.
We had already taken great precautions to ensure the safety of our tenants and worked to make sure those affected by the virus were accommodated, but in the wake of these announcements, I feared the worst. I (along with some of the owners we represent) thought scores of tenants who hadn’t lost income due to the virus would take advantage of the situation and refuse to pay rent. And although some tenants may act in bad faith, for the most part, we were incorrect. So far, tenants in the units we manage have paid their rent in much higher percentages than we expected, despite the apparent implication from local leaders that they could have gotten away with not doing so.
The vast majority of tenants are hardworking and honest people who do what’s right. As landlords and property managers, we shouldn’t cynically underestimate them because that eventually leads to treating them unfairly.
On the flip side, I’ve found that some tenants misunderstand their landlords to be hyper-rich “fat cats,” plotting to scam the inhabitants of their properties. Of course, the financial standing of people who own property is typically higher than that of the people who rent it, but the majority of landlords I know are by no means affluent.
An article from the Department of Housing and Urban Development shows that, nationwide, business entities own 25.8 million rental units, and individual investors (commonly referred to as mom and pop investors) own 22.7 million. These mom and pop operations often rely on their rental income to pay for everyday expenses and the upkeep of their property. A report by the National Apartment Association recently broke down what rents go toward on average: For each dollar of rent paid, 39 cents goes toward paying the mortgage on the property, 27 cents goes toward payroll expenses for employees who operate/maintain the property, 14 cents goes toward property taxes, 10 cents goes toward capital expenditures such as roof and HVAC repairs, and 9 cents goes to the owner.
In essence, to assume that landlords are financially invincible — or can withstand months-long rent freezes or strikes — is to misunderstand the relationship between owner and renter.
Have you made incorrect assumptions about the people on the opposite side from you? It’s important that both sides view one another as vital to the balance. Each should recognize that they depend on the other, and the other depends on them. Ultimately, we should all choose to stop seeing the tenant-landlord relationship in “us versus them” terms because it just isn’t that simple.
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