When two-year-olds first learn to say no, it’s a trying time for their parents. The epiphany that these all-powerful gods, known as mom and dad, who have controlled every aspect of their existence up to that point can be refused is intoxicating. Some studies have measured that toddlers argue with their parents 20-25 times an hour.
Kids learn that always saying no to their peers doesn’t make them many friends, and by the time we’re adults we’re predisposed to try to get along with peers as much as possible. Responding ‘no’ to requests from another adult is viewed as mean-spirited or hostile.
We need to tap into our inner toddlers and remember that in real estate investing and as a landlord, ‘no’ should be your default response to most requests. Even things that seem beneficial to you can cause you problems. Instead, landlords should define their policies and tell tenants how renting will work – not let the tenants adjust it to suit themselves.
Just Say No To Tenants
Consider, for example, a tenant who wanted to pre-pay rent for the first six months of their lease. On the surface this seems great, you get the cash upfront and lower your risk. Instead, such an offer tells you that the tenant has an unusual income. They either don’t make money for extended periods or are so bad at managing their money they have to pre-pay rent since they can’t maintain cash reserves. It can also put you in a legal position where you can’t evict them since you’ve already accepted payment for future months’ rent. If you haven’t agreed to rent to them yet, such an offer amounts to a bribe to try to get a rental that they expect they wouldn’t be able to otherwise.
I’ve had tenants who wanted ceiling fans and offered to have their handy father install them. I didn’t want ceiling fans, but not having to pay for the labor seemed fair to keep the tenants happy. I bought inexpensive fans for the father to install. Shortly after, I received a panicked email from the tenants that their father had determined the wiring was done dangerously wrong and needed to be fixed immediately before a fire burned down the unit. I hired an electrician to come in, at emergency prices, who determined that it was wired in an unusual way, but it was up to code and perfectly safe. I paid for the emergency visit and for the electrician to install the fans, in addition to purchasing them, which I didn’t want in the first place.
I should have said ‘no’ when the tenants asked for their father to install them. The correct policy is not to allow tenants, or their fathers, to perform repairs or make improvements to the property.
When You’re Tempted To Say Yes
Landlording requires you to look another adult, who is angrily demanding something from you, in the eye and say “no”. If you’re incapable of doing this, you don’t have any business becoming a landlord. It, and many other financial endeavors, will eat you alive.
If something sounds ok and you’re finding it hard to say no, don’t let yourself be put on the spot. “I’ll need to discuss this with my partner” or “let me think about it and get back to you” are both reasonable ways to refuse to say yes on the spot to a tenant demanding something from you.
Really though, you should probably toughen up and jump to ‘no’ straight away.
Beyond Real Estate
This works well when dealing with pushy salespeople and in other areas outside of real estate. Some salespeople use a technique where they get you to say ‘Yes’ to a series of obvious questions and lead you up to (hopefully) saying yes to their sales pitch.
If someone asked me if I like to save money or care about war orphans, I’d likely say ‘no’. Wherever their questions are leading, they’re trying their best to manipulate me. If I can easily derail them by just saying no, I’ll do it.
One of my favorite scenes in “The Founder” had Ray Kroc, the supposed founder of McDonald’s played by Michael Keaton, desperately trying to convince a restaurant owner to buy a milkshake machine from him. After an impassioned plea, desperately listing all the reasons why the restaurateur had to buy the machine, the owner looked at Kroc muttered ‘Nah’, and walked away.
Like a boss.
I released a book on Amazon about “Getting Started As A Small Scale Landlord”. It treats this as a part-time job you can give yourself, rather than a get-rich-quick scheme. If you enjoyed this post, I think you’d dig it.