It was a cold and rainy day when I walked into the apartment. The door was unlocked and ajar. And while I shouted “hellloooo” through the crack, I already knew no one was at home. My tenant had left in the middle of the night without paying his rent. Lucky for me I had a security deposit; I’d need it to clean up the mess.

I’m a compassionate person, always trying to believe the best about people, and while I continue that philosophy, there have been times (this being one) where I was taken advantage of. There are two schools of thought; one being the tough and tenacious one, always keeping a certain distance between you and your tenant. The flip side is the compassion one, where you get to know the renter and their family (that’s the one I’d practiced in this scenario). While one will rarely allow a social interaction, the other can cause its own set of headaches.

What I’ll aim for in the future is a blend between the two. I refuse to change my philosophy about life (its keep me sane and happy) still I realize there are those who would take advantage of anyone’s kindness. In other words (as heard in political circles) “trust but verify”.

No matter whom the person is; family, friend or stranger, always get references and a security deposit. In my case, if I hadn’t had the deposit, I’d have been out the money to get the carpets cleaned, not the end of the world, but not good business either.

Here’s the policy I’ve adapted and while sometimes difficult, it’s kept me out of financial trouble and it’s really pretty simply. Be upfront with the renter and tell them what you expect. Is the rent due on the 1st? Then make certain they know you expect payment on or before that date. Do you give grace periods? If you do, then expect them to be used. Do you charge late fees; again make that fact known in the beginning. If you’ll do this, then it will be you who sets the rules and there will be no misunderstandings later.

Now this next one is very important and probably (depending on your personality) the most difficult. Stand behind what you say; if you charge late fees, then charge them, don’t let it slide. No one likes to pay extra. For example, when you get your bill from the electric or gas company, have you noticed if you pay you bill on time it’s one number, and if you pay after a certain date, the figure is higher. They are letting you know, emphatically, exactly what you owe and what you’ll save by paying timely.

Everyone has difficulties in life, I certainly have had my share, and during those times, compassion is appreciated. Still, to keep their problems from becoming yours, you must be firm, not mean, but firm.

Doing so won’t hurt their feelings; instead you’ll find they treat you with respect, knowing their limits. This is your property, your investment, and your cash flow, and the FIRST person you must respect in these transactions is yourself.