

Leveraging the Chinese Landlord Principle - chrisyeh
http://chrisyeh.blogspot.com/2011/05/leveraging-chinese-landlord-principle.html

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kjksf
The conclusion (that a landlord will reward "good" tenants with lower rent) is
hopelessly naive.

My landlord hit me with rent increase the moment he could (and I consider
myself good tenant by the author's definition).

And why wouldn't he?

First, at least in my case, landlord (person who owns the building and gets
the money) is a different person than building manager (which takes all the
heat from annoying tenants and, I imagine, is employed by a landlord) and they
have full-time maintenance person anyway, so there's no feedback loop.

Second, if I decide to move, it'll cost me several thousands bucks and will be
a hassle, assuming I'll find a better deal elsewhere, so there's a strong
disincentive for tentants, good or bad, to move just to get lower rent.

Third, as much as we like to think that we e.g. value peace of mind over
money, money is very easy to quantify while peace of mind is not, which is why
money usually wins in contests like this.

The only reason for a landlord to keep rent low is to maintain low vacancy
ratio and that is dictated by the overall market.

~~~
Anechoic
_The conclusion (that a landlord will reward "good" tenants with lower rent)
is hopelessly naive._

Found the same thing when renting in the Boston area in the early aughts. My
roommates and I were good tenants - paid rent on time, were quiet & low key,
didn't call the landlord except for real emergencies (we were all mechanical
and electrical engineers so we basically took care of stuff that didn't
require a licensed professional ourselves), etc.

For our trouble we got whacked with 15 percent annual rent increases for three
years. Ninety days before our last lease expired, the landlord offered another
10% increase. When we hedged about accepting it for a few days, the landlord
decided that he wanted to renovate the place and withdrew the lease offer. We
moved out a couple of months later, but lived near the house and we could keep
track of what was going on. After 2 or 3 months of painting/cleaning/etc, the
house went back on the rental market.

It sat empty for more than two years.

He finally rented it when he offered a price that was lower than we were
paying when he booted us out.

Lose, lose. I am glad to see that there are landlords that appreciate good
tenants, but certainly not all of them do.

~~~
jamesbkel
Had the exact same situation (Boston, 00's, basically fixed everything that
didn't require trained electrician or plumber)... certainly didn't do me any
good.

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hugh3
_The basic Chinese Landlord principle is this: The best tenant is one who
sends a check every month and never calls._

That's a pretty good principle. But speaking as a non-Chinese landlord, I
doubt you'll find a landlord of any ethnicity who disagrees with this
principle. I'm all for catchy names, but this is really the Landlord
Principle.

~~~
felipe
Ironically, his experience would be totally different in China itself, where
the tenant regulations are non-existent in practice. I had to deal with a
number of landlords in two different cities, and I have to say that his
principle ("[...] that people will pay a premium for convenience and
stability.") is absolutely not true in China. Landlords will go to great
lengths to extract the maximum amount of profit to whoever they can get as
renters. It doesn't really matter if the renter is good or bad, because the
whole country is going through such a huge transformation that _nothing_ is
stable right now. Renters move in and out, new rules are changed or created
very often, etc... You can be the best renter (and I think I'm a pretty good
renter) and the landlords still are going to try to extract something from
you. And I cannot really blame them -- They are businesspeople, and their
apartments are investments in a highly volatile environment.

And I don't think it's even a cultural thing... Of course culture always play
a role, but I think the issue is simply how the market is right now (i. e.:
regulations, competition, instability).

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jamesbkel
As someone who has rented from Chinese landlords at multiple locations as
whose father owns property (not Chinese), I don't buy this.

Prompt/early payment aside, I have not experienced this and I've done a lot
more apt maintenance than not call about toilets or lightbulbs. First of all,
as mentioned in another comment, in both the case of my landlords and my
father's business:

>they have full-time maintenance person anyway, so there's no feedback loop.

Unless you're a royal pain in the ass, I doubt they'll raise rent more than
they do for anyone else. Otherwise, the delta convenience/hassle isn't enough
for them notice or care to give you a deal.

edit: Anecdotally, if you happen to be renting a house from a small property
owner who does not have a maintenance worker, then perhaps this may work (not
me personally, but a friend). That said, you still probably want to find a
place with a proper building manager.

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scrame
"...and we do everything possible to avoid calling, including changing our own
light bulbs and other such tasks."

Wait, people call their landlords to change their light bulbs?

~~~
Aloisius
Yeah this sounded crazy to me too, except in my house I do have a ceiling fan
with a bulb in it 20 ft up that is a pain in the butt to change.

~~~
ars
Completely unrelated to the topic at hand, but install a CCFL (not to be
confused with CFL) bulb in it. Cold cathode florescent light. They last longer
than LEDs (10,000 - 20,000 hours), use less power than LEDs (they use the same
as CFLs), can be dimmed, and have no filament so they don't care about fan
vibration, and are true instant on.

It boggles my mind that they have not completely pushed CFLs out of the
market. But so far they are a semi-niche item. You can tell them apart because
they have far more coils than a CFL, but very skinny ones (much skinnier than
a CFL).

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est
This whole "If I don't trouble others so troubles won't trouble me" philosophy
is very Chinese-ish.

This is the exact reason why Chinese won't overthrow their govn't. Everyone
assume being good citizen can make a totalitarian organization behaving
nicely.

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reteltech
This is a simple analogy that fits well within a business context. Great post!

