FREE NEWSLETTER
WHEN I WAS ASSIGNED a high school essay on business morals, I asked my dad if he knew of any books on the topic.
“No, Stevie, I don’t. From what I’ve seen in New York real estate, it would be a very thin book.”
For more than 40 years, that cynical quip has haunted me, coloring my view of rental real estate. I’m not emotionally suited to being a landlord. But I wanted real estate as a stock market diversifier—and I was drawn to the benefits of combining rental income with stock market dividends. Together, they would give me a passive income stream to pay for retirement even if Social Security in its present form were to perish.
As seniors, the urge to reckon with our lives is a natural component of what’s colloquially called the “wisdom of old age.” Some of you may have already embarked on a journey of savoring the memories of your successful choices and regretting the ones that didn’t pan out. What about me? I’ve found myself reflecting on the moral tests I confronted during my years as a landlord.
Lately, one particular transgression has been replaying in my mind. It’s a seemingly minor incident that happened when I was renting my first duplex in 1983. Its outsized impact on me may be attributable to the fragility of my budding values as an owner of small residential-income properties. I was a child of the Kennedy era of youthful exuberance and aspirations, and I fashioned myself as a humanitarian landlord. Faced with a moral dilemma, I imagined myself adjudicating with enlightened fairness and sensitivity.
But I soon learned how my worries about financial success could corrode my integrity. I had already rented the two-bedroom side of the duplex, but—after it had sat on the market for two months—was growing worried about the more luxurious three-bedroom unit. Just as the next mortgage payment was coming due and my concern was turning to panic, I received a call from a student at the nearby university. He and his friend were looking for a place, and they were interested in the apartment.
Even back then, I knew that renting to two fraternity brothers was a risk to neighborhood quiet and the property’s condition. On top of that, I suspected it might be difficult to find a renter for the remaining bedroom. But I was enamored by the idea of finally renting two of the three bedrooms. I walked the boys through the unit and signed them up.
I was one relieved neophyte real estate investor. After the guys took possession, my good fortune seemed unbounded when I received a call from a fellow in Placerville, a small city some 50 miles north of Sacramento. After an exchange of pleasantries and some questions, we agreed to meet at the property.
James was morbidly obese and walked with a waddle. Although struck by his awkwardness, I was not fazed by it. He was amiable, and seemed forthright and a promising rental prospect. His references and credit were exemplary, and we scheduled a walk-through. He met his two co-renters and then drove with me to a nearby coffee shop to leisurely sign the lease. Boy, I could really cozy up to this landlord stuff.
But my reverie was short-lived. Late that same afternoon, I got a call from one of the students. James was gross and disgusting, I was told. The boys would withhold their rent until I undid my arrangement with him. I did not relish the prospect of an expensive and stressful eviction process, along with the unraveling of my newfound self-esteem as a landlord.
After a few days of deliberation, I called James and explained the situation. The silence on the other end of the phone told me that this was not the first time he had been the object of discrimination for an illness that was probably biological and out of his control. He stuttered that he’d been looking forward to his new home but didn’t want to pursue renting it under the circumstances. He agreed to cancel our contract.
Clearly, James had more character than his landlord. It took a while before I could recognize and acknowledge my lapse. I can’t remember how I ultimately filled the vacancy, which didn’t seem to matter as much anymore.
Viewing life through the lens of retirement is not always painless. How deeply had I wounded James? Does his mind still wander to that phone call as often as mine does?
You may already be revisiting the decisions you made in young adulthood, regretting the missteps and delighting in the triumphs. Half a life later, I tell myself the same dilemma today would evoke a very different resolution. But I’m also aware that talk is easy—and it’s behavior that’s hard.
Steve Abramowitz is a psychologist in Sacramento, California. Earlier in his career, Steve was a university professor, including serving as research director for the psychiatry department at the University of California, Davis. He also ran his own investment advisory firm. Check out Steve’s earlier articles.
Want to receive our weekly newsletter? Sign up now. How about our daily alert about the site's latest posts? Join the list.
If they had anything close to your level of decency, perhaps those 2 students have endured the pondered thought about their actions.
Thank you. I have often wondered who those guys turned out to be as adults.
I am more interested in the present, since, as Jeff says, I can’t change the past, and at 75 there may not be all that much present to enjoy. But every time I read one of your articles about being a landlord, I congratulate myself again on knowing it would a terrible fit for me. I have a couple of percent of my portfolio in a Vanguard REIT fund and that’s all the real estate exposure I want. And I’m thinking of selling out of that.
Hi
Yes, if I had it to do all over again, it would be REITS, especially in California where the.cost of housing is so high, your investment return is quite low. Why pass up a 3.5% dividend and 10% capital appreciation? I was just programmed the other way by my parents.
Steve, I echo Jeff Bond’s comment below, and admit that I still let my selfish motives override my concern for others more often than I like. I’m far from perfect. I say that not as an excuse, but as a truthful recognition that I need to continue to work on being better. Even so, neither of us is strong enough to carry the weight of all our mistakes. I hope you find a way to slip from under the burden.
Hi Ed,
Given the lottery of birth and my childhood, I’m not sure I had that choice. I benefit from a good deal of self-insight but, yes, also much guilt. But I do believe the child is father of the man. I wanted to be a sports writer when I was young, but I realize now it was no coincidence that I landed on psychology. I believe I’ve helped many people achieve insight that will help them not repeat the troublesome patterns of their past. But, yes, if I ever had the experience of having myself as a patient (oh, God), I might well think this guy may be in touch with himself, but he’s really a tortured soul! Always admire what you have to say.
Steve, this was a great story. I’ll echo Jeff and Ed as well, and add that respect the willingness to examine yourself, and to apply what you know about yourself to help others.
Steve – I occasionally revisit good/bad decisions from the past. But I keep my emotions about them in check because (1) I cannot change the past, and (2) they were driven by who I was at the time – emotionally, psychologically, mentally, physically, etc. I know I’ve changed through the years, so I hope I can view things through the lens of my accumulated experiences. All I can do is hope that then next time an acute condition occurs, I do the right thing. That’s all we can do. You did what you felt you had to do at the time. Relax now with the knowledge that the next time you’ll make a better-informed decision.
Hi Jeff
That’s a healthy philosophy but one, for better and worse, not available to me. Probably both from genetics and upbringing, I really have little choice. As you can from my articles, I live very much in my head and some of the residue from my past informs my present. Here’s an example from the way I handle writing checks. In my seventh grade class, we were given a lesson on how to write a check. I thought I did a great job but Mrs, Bowker didn’t. I had entered the dollar amount too far away from the dollar sign. According to old Mrs. Bowker, a crook could insert a number between it and the numerical amount! She went up to the blackboard (remember them), drew a rectangle on it and proceeded to use my check as an example of how not to do it, To this day, whenever I make out a check, I look to see that the amount is squeezed next to the dollar sign. Thanks for taking the time to write in again.
While your teacher was embarrassing you, did she mention that if you had properly written the dollar amount in words, state laws require the bank to pay the amount written in words , not what was written numerically ?
People never forget the slights from their teachers . Not uncommon that students might be told years ago ” you’re not as smart as your brother” . I hope that’s no longer the case in schools.
Hi Paula,
Teachers are so transformative in many of their students’ lives. In my case, they succeeded in providing the the support and reassuranc I never fully got from my parents. But, yes, unfortunately for some kids their criticism can be devastating.
Regarding slights from people in authority, I think it’s important to keep in mind how much better the world is today than it was 30-plus years ago. I recall bosses screaming obscenities at me. I recall teachers belittling me and other students. Looking back, it’s hard to imagine such behavior was considered acceptable. The good old days weren’t so good.
I have to say that I was in the Army for more than two decades and don’t recall having obscenities screamed at me since boot camp. I have stood at attention in front of my boss’ while they delivered clear criticism of some wrong on my part, but the words used were perfectly appropriate. This may be why I can be overly direct for some folks’ taste.
I remember being told on one such occasion, “You are not the head of this organization.” He was. Good times 🙂
Hi Jonathan,
Your resilience! Now I know how Jonathan struggled to become the Jonathan we have come to know.
About those “good old days,” I believe for some children the past can be so painful they must “reinvent” and reinterpret their experience to move on. The lucky ones can do this, but for many of the people I’ve worked with, healing past hurts is all too elusive. So often, the scathing rebuke says more about the screamers than about us.
Purely out of curiosity, but I never heard of renting a duplex by bedroom. In your example, the two boys rented two bedrooms and had no choice about who rented the third? Does such a unit have a common kitchen and living area?
I used to work in the defense industry. The old-timers said that during WW2, the swelled workforce was forced to rent beds by the shift. It remains the worst renting situation I’ve ever heard of. I regret not pressing them for more details. One can imagine many problems in that system.
My husband and I rented a variety of places before we bought our first home, and we saw our two daughters go through that in college and beyond. I agree that what Steve describes here is unusual. The only similar example I can think of is when one of my daughters moved into her first apartment in college. It was a big complex in our college town, and they rented apartments out by the bedroom. Each bedroom even had its own lock on the outside. They shared the common areas but had no say as to who rented vacant bedroom—the apartment complex management office handled that. I thought it was odd at the time, but in retrospect, it’s not much different from university-owned dorm-style housing.
Agree. I would expect the apartment to be rented to one person who would handle the sub-lets/flat mates, or to three at the same time. No way would I agree to the setup Steve describes. Sounds more like an AirBnB than a long time let.
Exactly 👍
Hi
The duplex was near a community college and students generally don’t have a choice. Of course, in this unfortunate instance, they wielded their power on a vulnerable landlord. Each side of the duplex had only one kitchen, which the roommates all had to share. It’s the fate of being a student and for most a need to live on a barebones budget. I had a desk with rectangular concrete slabs for legs and an old door for my desk. Thanks for writing in again.
I was once a student, and shared flats. It was up to the student who found the flat to find her flat mates, not the landlord. In my experience all existing flat mates had to agree on a new one. I’m surprised the situation you describe is even legal, but I was renting in the UK.
Maybe that’s the way it should be, When I was accepted as a freshman, I had no choice about who or what kind of person I wanted as my roommate. As it happened, I was extremely fortunate. He became my best friend and 60 years later he still is precious to me.
That sounds like a dorm, run by the university, right? I thought we were talking about private rentals. I believe shared dorm rooms are a specifically US situation, and it’s a bit odd, given US hospitals have private rooms instead of wards. Not relevant to the private market, though.