Tales Of The Rent Man

There is so much to tell about how I became the rent man.

For many years we were property managers for landlords who mostly lived out of state. They invested in real estate as a means of building wealth. They had hopes of retiring in dignity someday. They were not wealthy, they were middle class working people. Putting this in perspective, my lawn guy runs his lawn mowing business ten hours a day six days a week. Over the years he has accumulated 8 rental homes. When things break, he goes and fixes them. Not exactly your vision of what a landlord is like, no? No forcing innocent tenants to live in squaller, no turning off the electric if they don’t pay on time. Truthfully, he is typical.

There is a misperception that landlords are rich blood suckers who make a fortune by collecting rent every month from hard working people.

In Florida where we live, a little bit more than 30 percent of all rents collected go to pay taxes and insurance. So much for getting rich quick. The reality of it is, when repairs and maintenance are factored in, one is doing well to break even once the mortgage payment is made. Yes, that’s right. A part of the landlording business is using leverage in building your portfolio of properties. The gain is made over time as the properties appreciate. Even that doesn’t always happen. Like with stocks, they can decline. If that happens when you need to sell, well, you can have spent years of dealing with tenants, repairs, and turnover for nothing. This is not for the faint of heart. There are no guarantees.

Many find this an ignoble calling. I have read articles in the newspaper when there was such a thing, about miserable and miserly landlords who picked the pockets of disadvantaged poor tenants. I remember one miserable twit of a columnist state that landlords should be responsible for how the tenants live and pick up after them.

Becoming a landlord is not much different than investing in stocks or commodities like gold or bitcoins. This is a business. You run it like a business, you may make money, maybe. You run it like a charity, you will soon be in the bread line yourself.

There is no one school of thought when it comes to successful strategies for building a valuable portfolio. One I have seen work well is to buy cheap properties and keep them in good condition. The more the better. If you have two nice properties and one becomes vacant, your occupancy rate becomes 50%. That’s a money losing proposition. If you have five cheaper properties with the same overall total value and one goes vacant, your occupancy rate is still 80%. Nuff said.

Rent man, yes. Many years ago, when I was starting and learning, we managed a group of duplexes in an area of town known as Suitcase City. It was Paradise Lost as you can guess. Suitcase City is the unofficial name for an area just west of the University of South Florida. It holds a transient population. You’ll find there a mixture of poorer people, students and ner’er do wells.

People here paid rent in cash and you had to collect it. They didn’t have bank accounts. That’s just the way it was. There were six duplexes of two units each. Everybody knew when to expect me. I stopped at each home to collect the rent and talk to the tenants. I would find out how things were going and if there was anything I needed to know about. I would start gathering a heard of children cavorting around as I went from house to house singing loud throughout the neighborhood ‘Rent man, rent man, the rent man is here!’

By the time I was done visiting every tenant, my pockets were bulging with small bills and I would start to sweat. This was the kind of neighborhood when it turned dark, pizza delivery guys would be robbed and sometimes shot.

I wanted to be Catholic so I could recite the rosary as I headed by myself all the way across the long parking lot to my car with ‘rent man!' ringing in my ears. I never was accosted, robbed of hurt. I was lucky. Good thing that counts.

Regardless of what conclusion you have drawn about this patch of Americana, it was a community. People knew each other and watched out for one another. They would let me hear about it too. It was all too easy to end up renting to a bad tenant, say a drug dealer or a hooker. My phone would ring off the hook! Every neighbor would be on the phone, calling me and complaining, asking me what the hell I was thinking renting to that trash. The rent man had to fix it. And that’s another story for later, on TalesOf The Rent Man.