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The Most Overlooked Part of a Rental Agreement or Lease

Nails at Pharmacy
The local pharmacy wants to sell your new tenant nails to put holes in your walls! Help them to make better choices by including useful information in your rental packet.

Every experienced landlord has a good rental agreement or lease with all of their favorite protective clauses.  But most landlords forget the most important protection of all:  the other stuff you give to your new tenant or resident along with the lease.

Just look at the above picture of a local pharmacy.  They’re selling nails.  Your new resident will walk in and buy those to hang pictures.  If you have plaster or sheetrock walls, that’s bad news for you.  The nail is going to rip out a chunk or a gash, especially if what they hang is too heavy.  Just below the nails are sticky hooks.  Those can be just as bad.

That’s why I give my residents wall anchors.  I say, “Go ahead and drill a hole, then tap this anchor in.  If you need me to come drill the holes for you, just mark out where you want your pictures and I’ll come in to drill them for you.” During the lease, pictures stay secure.  At the end of the lease, the anchors pop out and the holes are quickly spackled or mudded over.  Savings: $30 per patch.

Other things you should give a new resident:

  • A bedbug brochure:  Show them a picture of a bedbug with some information about how they act and what the warning signs are.  Make it clear that bedbugs affect clean people so there’s no shame.  Tell the resident that they should notify you immediately if they suspect bedbugs so that you can call an exterminator.  In a building with apartments above and below, you can save $6,000 by not having to treat the neighbors, as well.
  • Move-out and cleaning fees: This itemizes the costs of leaving things dirty upon move-out.  Not only is this required before a security deposit can be withheld, but also it motivates people to clean for you.  Savings from not having a professional come in to clean the apartment: $300.
  • Trash brochure:  Tell the resident how they get rid of their trash, where they can buy the right bags, and how they can save money and/or help the environment by recycling.  Clean apartments don’t attract mice or cockroaches, which if you need to exterminate, might cost you $1,000.
  • Fuel assistance and insurance forms: Tell your new resident how they might qualify for a government subsidy for heating.  Also, tell them how cheap renter’s insurance is in case anything gets stolen.  More money for them means more assurance to you that the rent will be paid in full and on time.  Savings: from $0 to one month’s rent, depending on what kind of bad luck your resident has.
  • Tell them it’ll be all right:  Everyone at some point runs tight on cash.  Tell them you won’t be upset as long as they let you know in advance that they’re going to be late paying rent in any given month.  Savings from avoiding “where’s the rent?” worries: priceless.

What else do you tell your new residents?  Leave your thoughts in the comments below!

How Many Landlords are Good at Customer Service?


Here’s an interesting, true story with a moral.

I went into a tenant’s apartment to examine their garbage disposal, which had stopped working.  It was just a piece of broken glass wedged into the grinder, so I removed that, reset the trip switch, and said, “Let me know if there’s anything else I can do!”

The tenant said, “Actually, the toilet is very slow.”

I thought to myself, “Oh, the previous folks had troubles with this thing…  I guess cleaning out the jets only fixed it temporarily.”

I said, “Let me take a look at it.”

It was clean, like the rest of their apartment.  I flushed it.  It seemed to work.

The tenant volunteered, “We can’t put paper down it.  It clogs.”

I said, “What?  What do you do with the paper?”

The tenant said, “We put it in that can there.”

I looked in horror at the small trash can sitting beside the toilet.

I said, “That’s horrible!  Why didn’t you say anything?!”

The tenant said, “Oh, it’s not a big problem.  We didn’t want to bother you.”

I don’t know about you, but I wouldn’t rent an apartment like that.  What kind of landlord have they had in the past, where they were afraid to mention that one of the most basic services — a toilet — was hardly working?

I arranged to replace the toilet that very afternoon.  I bought the one in the picture because I wanted to make sure that if they decided to flush a bucket of golf balls, it would handle it.  They were so grateful they gave me a plate full of rice and beans and a pork rib.

Two lessons to share:

1.) Use wax rings on toilets.  When I removed the old toilet, I saw a plastic flange that had been used instead of a wax ring.  I think they don’t even sell these anymore.  This flange was constricting the siphon trap exit and reducing the flow rate.  I probably didn’t need to replace the whole toilet so much as just the interface with the abyss.

2.) Tenants are people too.  Whether you tend to be a forgiving landlord or a strict martinet is up to you, but you can easily go too far to either side.  Don’t let folks walk all over you, but at the same time, don’t cow them into throwing toilet paper into the trash.  Think about it this way: if they can flush an entire bucket of golf balls, then your life will be better, too.

Have you had a similar experience?  Share your thoughts in the comments below.

Who gets to choose their customers?

Well, pretty much every service or knowledge business.  Let’s look at landlording, manufacturing, and small business consulting as three examples.


Landlording is one of those embarrassingly interpersonal businesses:  “Hello? I’m here to unclog your toilet.”  “I’m not dressed!  Just take care of it please!”  Even with toilets that flush buckets of golf balls and other modern housing marvels, you’re trusting a breakable piece of a very expensive asset to a relative stranger.  If they stop paying you or start causing problems, it’s very expensive and time consuming to end the relationship.  After all, their basic home and shelter are at stake, so third party mediation (e.g., the courts) usually comes into play.

Different troubles await manufacturers, especially those offering fixed-price contracts.  If you’re going to accept a job to make 100 of a new kind of widget, you want to feel warm and fuzzy about having the right drawings and knowing that they’re not going to change quantities or specifications once you start the run.  In this case, you have to negotiate for up-charges, or offer concessions, or arrange a (hopefully) peaceful walk-away.

And for small business consulting, where you might feel you want every client you can get, you really want your customers to sing your praises and give you word-of-mouth traffic and their own repeat business.  You definitely don’t want to try to please a habitual grouser, or to keep quoting a lookie-lou, or to otherwise commit to helping someone forever dissatisfied.

So What Can be Done?

Good landlords have a rigorous screening process (never discriminatory, always based on economics!) and so might lots of other businesses, except I very rarely see open communication about customer screening.  As a potential customer for a lot of different services, sometimes I wish I could get feedback:

Dear Prospective Client:

You have had us requote variations of the same thing for the last three months.  We’ll be happy to continue working with you after a one month hiatus, or you can sign and return one of our quotes and we’ll get started right away.


But when does that ever happen?

The best general advice that I can give is that sometimes it’s okay to say no to a prospect.  As soon as you do, you’ll be thinking about the next prospect.  Much better than wishing you weren’t locked into a bad situation.