Bigger Pockets (www.biggerpockets.com) has one of the best forums on the internet for real estate investors. According to their figures, they currently have almost 50,000 members.

One of the recent threads, “The Top Five Landlord Mistakes”, generated a lively discussion (http://www.biggerpockets.com/forums/52/topics/23212-the-top-5-landlord-mistakes?page=1).

There are some really good “top mistakes” listed in these posts. But I also found a great many of what I’d consider myths listed among the mistakes.

1) The idea that you have to be totally ruthless when it comes to managing your properties. Throughout the threads, you read language like “never do a tenant a favor”, “never accept a late or partial payment”, and “evict immediately for non-payment of rent”. Do I sense a bit of a Nepolian complex here guys?

Being a landlord is not all that much different than running a hotel, a restaurant, or a plumbing business. Try being a plumber who is always rude to his customers. How much business will this plumber actually do? Will the plumber get referrals?

You get nothing out of being a total jerk to your tenants, accept perhaps a momentary ego boost. I’m not saying that you should let your tenants walk over you. However, you also need to be courteous to your tenants, even when they give you a good reason not to.

2) Doing a straight rental versus doing only lease options. A trend among some real estate gurus is to teach that one should only do lease options, and never do straight rentals.

I do lease options. And I also do straight rentals. Why? Well, the simple answer is that some houses just don’t make good lease option prospects.

I’ll give you a perfect example. I’ve got several homes in one neighborhood that easily rent for $500 to $600 per month. I have $20K to $25K invested in these properties. The market value is right around $50K for these houses. However, the people in this neighborhood just do NOT have money for down payments.

The culture of that neighborhood is to rent, and preferably have your rent paid by the government. Plain and simple. Why fight an obvious market trend.

Also, there is nothing that makes higher priced homes in nicer neighborhoods inherently a better investment. My friend Robert Elder has built his business around buying properties in low income areas, and renting to tenants who get rental assistance through the Section 8 program. At this point, he has more than 250 houses that yield more than $1,000,000 each year in rent just from the government, not to mention the rent that his tenants pay.