The IRS and Property Management Training

What That IRS Taught Me About Property Management Training

The recent mail contained a letter from the Internal Revenue Service regarding a 1099 individual that we had filed on last year, and the conversation that followed ended up providing an excellent lesson on property management training and how not to rent your house.

The gist of the complaint correspondence was that the individual’s last name didn’t match the tax payer identification number we’d supplied on the IRS return form.  That’s because the IRS had combined the vendor’s middle initial with his last name, creating a unique new last name that of course didn’t match the tax payer ID.

I figured this out in less than a minute after accessing the PDF reports on my computer.

Scanning documents, by the way, is something that’s incredibly helpful and time saving if you ever decide to rent your house.

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Telephone Call To The IRS

Granted, anyone can make mistakes.  When you rent your house there are going to be errors, and it’s best focus on problem solving instead of worrying about the cause of the mistake.

The problem was that the IRS letter only said what to do if I’d made a mistake, not what to do if the IRS made a mistake.

So to cover my basis I made the IRS phone call seeking clarification, pressed my extension and held for not too long of a time.

My talk with the IRS representative was pleasant enough, but she wasn’t really focused on solving the problem – the combination of the middle initial with the last name – but instead cited various tax publications, rules and regulations.

After a few minutes on the phone the representative determined that I really didn’t have to do anything since it was an IRS error, but suggested I retain the notice for a few years.

How To Rent Your House – What I Learned From The IRS

This exchange got me thinking about how we interact with tenants when they call with a general issue or question, a task that frequently comes up when we discuss how to rent a house.

For instance, when a tenant calls with a repair request or question, it’s tempting to refer to the lease and use the terms and conditions as guidance, and cite those to the tenant.

Doing this is sort of like following the letter of the law and not the spirit of the law, which is not a good way to rent your house.

After much experience in working with renters, property owners and many property management issues, and training real estate investors that want to now how to you’re your house, I can tell you that it’s the little things that rub tenants the wrong way, not the big things. 

Charging tenants for little things, or asking them to do the work themselves, usually ends up creating bad will and can lead to a good tenant not renewing its lease.

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How To Rent Your House

Here are a few actual ‘how to rent your house’ situations I've had recently and how they were handled.

Replace air conditioning filters

Pay for a door lock replacement

Replace lights and ballasts

Repair toilets and faucets

Re-plant the landscaping

Replace cracked or broken glass in the doors and windows

Cover or split the costs of important air conditioning, heating, plumbing or electrical work that would normally be paid for by the tenant

Clear clogged toilets, sinks and drains

All of these tenants had clauses in their rental agreements that placed the cost of repair on the tenants.

Surely we could have asked the tenant to read the lease, pointing out to the tenant the terms and conditions, and rules and regulations? 

Yes, but our goal is to keep renters satisfied and keep their rent money coming in on time, every time.  But unless there's any abuse of property, we will take care of any repairs as they arise.

Jeffrey Roark
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