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People who’ve driven cars before the millennium change are familiar with what is now known as “Level 0” automation. The driver controls the machine without assistance: steering, braking, throttling, power, driving in reverse, parking and all of this without airbags–using a physical key to manually open doors.

Current automobiles are equipped with “Level 1” autonomous functions: anti-lock brakes, power steering, airbags, and cruise control. Often many of the these Level 1 features are required by law.

Some cars come standard with “Level 2” features: automatic parking, automatic steering & braking. Many sedans self-park between two cars on a street, while a majority of 2019 vehicles warn and direct drivers as they back up through rear-facing cameras.

Level 1 and Level 2 autonomy in vehicles allows drivers a choice to either employ the SmartFeatures, or not (in most cases).

This post is not about providing an equivalent rating system for homes (although this might not be such a bad idea for a future blog). However, instead, this contribution focuses on the idea of tenant choice, disclosure and training prospective tenants to use Smart Home Features.

Choice: Yes, No & perhaps this, but not that.

A previous post highlighted a landlord who required all tenants use an eKey. He disallowed physical keys entirely.

A court ruled against this action. Among issues cited: the landlord had the ability to constantly monitor tenant’s entry and exists. The decision required tenants to also carry a charged smartphone with a 3rd party app at all times. The court was persuaded mostly by this later requirement and not the privacy issue, per se. (Although, privacy and quiet enjoyment of living are in my opinion equally as important.)

It is good to let tenants know the features are available in your prospective rental properties. However, property owners should allow them the option to activate features and exercise the liberty to disengage others. When renting your properties, allow preferences for newbies and experts alike in using and customizing your pre-installed devices. *Also, should your tenants desire to expand or reduce your pre-installed Smart Devices, allow them this flexibility well.

After all, at lease signing your property becomes their rental. Like the Level 1 and Level 2 cars, allow them to opt in or opt out of each SmartHome feature, for any reason they may have.

Towards that end, also mentioned in a previous post, Baron recommended: vacant Smart Home rentals remain connected to wi-fi, and; incorporating the monthly internet charges into the lease payment. There are many advantages to these actions-especially for the remote landlord. Wi-Fi extends property management options to unoccupied rentals. Connected homes are safer, cost-effective and provide peace of mind. That said, a future article will detail more on this subject. For now, prospective tenants should be aware the wi-fi utility is always on, but may also be: disconnected entirely, customized for their exclusivity, or changed out with another provider — should they elect — after lease signing. (However, the original connection must be restored prior to lease termination.)

Greater choice given to your tenants managing your Smart Home confers more control and satisfaction. And finding (and keeping) satisfied tenant makes your life easier.

How to train (and amaze) your tenant

The walkthrough makes an ideal time to introduce tenants to smart connected features. During my showings, most tenants are delighted to see all of the upgrades to the property. It also makes a great time to take them on a test drive with your smart light bulbs, smart blinds, and automatic door locks. If your property has a smoke alarm, CO2 monitor, motion-activated sensors, Bluetooth or other speaker systems, there will be no better time to demonstrate them than when both you and they are in the house.

If a smartphone app is required for them to download, show them where to find it and how to install it.

If your tenants need to ‘set up and individual account’, walk them through this set process so they can activate your devices within their ecosystem. ( I’ve noticed most of my tenants have a Nest/Google account and most already have Alexa or Google Assistant are familiar with setting up). Tenants may be familiar with installations and even have an accounts on their own.

Let tenants know that during their lease term, no other person will have access to these devices.

Disclosure: Bare all

Finally, these connected devices, hubs and appliances should all be spelled out individually and clearly in the rental contract. Listing these might advantageous for a future ‘hand over’ walkthrough. Leases should spell out responsibility in safeguarding or storing any unused cable modems or other disconnected/unwanted devices. (For example, if a working smart bulb burns out, do you require an exact replacement, or will a normal bulb suffice?) As a property manager, if you have parameters about adding new Smart Home features or devices, this should be disclosed in writing. Finally, explain your policy of returning the rental and Smart Home devices in the same condition as they found.

Final thought

Video Doorbells, Cameras, and listening devices should be boxed up removed after lease signing, for liability reasons. Unplugging them may not be enough. Tenants and AirBnB guests are rightly paranoid about this growing ‘Illuminati’ problem.

by Baron

As a landlord who writes about the benefits of SmartHome tech to other property owners, the there is of course another side to the debate. Some renters prefer a dumb home.

As a landlord who writes about the benefits of SmartHome tech to other property owners, the there is of course another side to the debate. Some renters prefer a dumb home.

A clear majority (57%) of tenants seek technology when they search for new homes. Additionally, during the 2018 holiday season, gadgets such as smart speakers were among the most purchased technology items. The ease, convenience, and security these devices provide makes it inevitable that regardless of if landlords do not pre-install them, renters probably will.

However, a best practice involves listening to tenants, and also not exposing yourself to unnecessary liability.

In recently case, an eager landlord insisted tenants use their smartphones to unlock their homes, and refused provide them physical key. The a group of New York city tenant sued the landlord, and won the right to have a physical key.

What makes this case interesting is that the tenants argued that they were trapped in their apartments without a smartphone. In addition to this, some tenants could not afford a smartphone, thereby making the unit unattainable for them to lease. Finally, the smart lock manufacturer had a policy allowing them to sell the data collected by the system to others–without consent.

One of the biggest takeaways from this ruling revolves around flexibility. In a city like New York, many apartments use electronic keying-door opening systems of one sort or another. Many use electronic keypads, some physical or electronic keys, others use human door attendants, after hours phone calls or receptionists. As a multi-unit property manager overseeing entry/exist, a good portion of time may involve replacing physical keys to tenants at odd hours. If you possess a leased unit, why would a landlord (inadvertently?) choose to be responsible for allowing or preventing access to a paying tenant? It’s easy to see the exposure in a scenario where an even-more-eager landlord attempts to convince a slow-paying-renter by locking them out.

To streamline this process, remember that a physical key has two distinct advantages: ubiquity, shifting the liability from landlord to the tenant. One of my favorite experiences as a property owner is when I give all of the keys to a tenant after lease signing. Like someone delivering flowers, the expression on their faces makes my day. I have a ‘key policy’ in my lease outlining the inventory of keys, fobs, and garage door openers as well as their costs. (Many HOAs issue fobs to use swimming pools and recreation centers). More importantly, on the day the renters receive their keys, they become responsible for the unit. If they lose them, forget them, etc., it’s on them. I’ve also had tenants who replace locks, mailbox keys, and change garage door openers, but, their security deposits cover these occurrences when the lease is up, thanks to the already-agreed-upon key policy. (*I also list all smart devices in the home, show them how to use them, and encourage them to either disconnect or change the passwords.)

What about the tenant who wants a completely disconnected, dumb home. Each property owner will need to make this determination whether or not this type of arrangement works for them.

In some homes I rent, landscaping is provided by either the HOA or me. In these cases, the automatic sprinkler must function; otherwise, the HOA or community will penalize the owner. Another example is automatic blinds, which have the option of being manually drawn and closed.

The best solution is to provide options where Smart devices can be unplugged/unused and still function using manual means. Another option, as in the sprinkler case below, explain to the tenant what times the device will activate, and to the best extent possible, automate this process. In this way, the tenant who has concerns can decide whether your home is a good fit for them.

Electricity is a mandatory utility. However another question would be, what happens when you provide tenants a disconnected home, and then they desire to automate it to respond to Alexa, Cortana or OK Google?

A clear majority (57%) of tenants seek technology when they search for new homes. Additionally, during the 2018 holiday season gadgets such as smart speakers were among the most purchased technology items. The ease, convenience and security these devices provide makes it inevitable that regardless of if landlords do not pre-install them, renters probably will.

However, a best practice involves listening to tenants, and also not exposing yourself to unnecessary liability.

In recently case, an eager landlord insisted tenants use their smartphones to unlock their homes, and refused provide them physical key. The a group of New York city tenant sued the landlord, and won the right to have a physical key.

What makes this case interesting is that the tenants argued that they were trapped in their apartments without a smartphone. In addition to this some tenants could not afford a smartphone, thereby making the unit unattainable for them to lease. Finally, the smart lock manufacturer had a policy allowing them to sell the data collected by the system to others–without consent.

One of the biggest takeaways from this ruling revolves around flexibility. In a city like New York, many apartments use electronic keying-door opening systems of one sort or another. Many use electronic keypads, some physical or electronic keys, others use human doormen, after hours phone calls or receptionists. As a multi-unit property manager overseeing entry/exist, a good portion of time may involve replacing physical keys to tenants at odd hours. If a unit is occupied, why would a landlord (inadvertently?) choose to be responsible for allowing or preventing access to a paying tenant? It’s easy to see the exposure in a scenario where an even-more-eager landlord attempts to convince a slow-paying-renter by locking them out.

In an effort to streamline this process, remember that a physical key has two distinct advantages: ubiquity, shifting the liability from landlord to tenant. One of my favorite experiences as a property owner is when I give all of the keys to a tenant after lease signing. Like someone delivering flowers, the expression on their faces makes my day. I have a ‘key policy’ in my lease outlining the inventory of keys, fobs, and garage door openers as well as their costs. (Many HOAs issue fobs to use swimming pools and recreation centers). More importantly, on the day the renters receive their keys, they become responsible for the unit. If they lose them, forget them etc, it’s on them. I’ve also had tenants who replace locks, mailbox keys and change garage door openers, but, their security deposits covers these occurrences when the lease is up, thanks to already-agreed-upon key policy. (*I also list all smart devices in the home, show them how to use them, and encourage them to either disconnect or change the passwords.)

What about the tenant who wants a completely disconnected, dumb home? This article, written by a tenant who deals with security in the home, brings up several issues. Each property owner will need to make this determination whether or not this type of arrangement works for them.

In some homes I rent, landscaping is provided by either the HOA or me. In these cases, the automatic sprinkler must function, otherwise the HOA or community will penalize the owner. Another example are automatic blinds, which have the option of being manually drawn and closed.

The best solution is to provide options where Smart devices can be unplugged/unused, and still function using manual means. Another options, as in the sprinker case below, explain to the tenant what times the device will activate, and to the best extent possible, automate this process. In this way, the tenant who has concerns can decide whether your home is a good fit for them.

Electricity is a mandatory utility. However another question would be, what happens when you provide tenants a disconnected home, and then they desire to automate it to respond to Alexa, Cortana or OK Google?

Your tenant’s lease ends next month. They’re moving. You’re thousands of miles away. What do you do?

Here are a few suggestions to minimize the transition period while quickly ushering in next occupant.

• Advertise early —

Suggest to your existing tenant they consider allowing new prospective tenants to view the location during their final months. If your property sits in a hot market, new tenants will gladly rearrange schedules to meet the requirements of the outgoing tenant. However, there is a word of caution: Make it easy for the outgoing tenant. They are under no obligation to allow this. Also, be aware there may be a liability issue should the ‘showings’ damage their effects.

• Leverage real estate platforms to facilitate correspondence (text, email)

Use one of many free online platforms to advertise the availability of your property at least 45-60 days before lease termination. Direct interested parties to email you (only). Arrange ‘showings’ all on one day, say on a Saturday. *note: very interested parties will make themselves known. Most individuals use smartphones, so communicating via text and email is a good option.

• Update your monthly lease amount, for a one-year term

Again, many free online services guide the current range for your area if you are unsure.

• Arrange a move-out inspection with the outgoing tenant.

It is best that you be present and lead this walk-through. If this is not possible, skip to letter ‘c’ below.

Either way, this final inspection is eased considerably by a. providing the tenant a copy of their ‘move-in’ inspection, and b: encouraging the tenant to be diligent by speeding up the return of their security deposit.

If you, a remote manager, are unable to be present for the inspection consider one of the following options.

a. hire a local real estate professional to do this. If this realtor is also locating your new tenant, the ‘cost’ for this should be about one month’s rent. The physical presence of a pro during the handover is essential.

b. if you have trustworthy relatives, friends, neighbors have them perform the inspection and sign off.

c. if you have the courage, have the tenant take several photos of the interior/exterior and perform their inspection. Your trust in this person is vital. Remind them that you will verify their assessment. Go over details with them, like shampooing carpets, cleaning ovens and ensuring functional and closed window coverings. Have them mail they keys, fobs & remotes back to you. I’ve done this before. In the world of Airbnb, self-evaluations of the property are not as ludicrous as they appear.

• Set a lock box with a remote key.

If you’ve equipped your house with a smart lock, this step is already complete.

1. Transfer the utilities to you. Inform the HOA. Set up/Reactivate internet and wifi.
2. Hire a cleaning company

You are on the hook anyway to clean the house, so paying a few dollars for a professional are funds well spent. However, this company will also be a 2nd set of eyes for you as you will have them perform a room-by-room detail of the condition of the home. Tell them your intent, and have them take photos.

• Have handymen, painters, and contractors perform repairs.

Filters need changing on HVACs, Range-top grease filters need replacing, basic landscaping can always enhance a unit, rooms may need to be re-painted, carpets need a deep cleaning (or replaced entirely). Some appliances may need replacing and serving. Allow entry via remote access verifies their arrival, and reference their invoices and photos for later.

• Allow prospective tenants to view the home while repairs are underway.

Many landlords also require them to complete an application around the same time. Self-led viewings are also advantageous, with or without the contractor present.

• Sign a new lease.

Have the new tenant perform a self-inspection and return it to you within one week of their move in. Once you have a confirmed move in date, transfer those utilities back to them. Many ‘State-specific’ templates exist online, and all smartphones allow users to sign documents. If the internet is included as part of your lease (which I recommend), be sure the tenant resets any routers and passwords.

Wella. What do you think? I’d welcome any comments.

Baron

It is true that some tenants are better than others. However, no matter how good the credit score, rental history or fancy car, at some point the tenant vacates the property. Property owners then encounter the ‘make-ready’ for the next occupant.

The purpose of this blog is to reduce both the frequency and severity of this inevitable event. Knowing that make-readies happen and intervening at specified time frames provides both advantage and costs saving.

Frequency:

Although some landlords hold properties for less than eight years, in which much of the following will not apply, Baron recommends long-term property owners recruit and retain tenants at least 24 months. After the first year, the make-ready expense should be completely absorbed. Any extension thereafter becomes profit. The 1-year lease, standard in many jurisdictions, is hopefully a starting point for a long-term relationship. Annual make readies are clearly not cost effective and easily strip equity from your rental.

1. Reward the good: Notify renewal tenants offering them a choice of shorter and longer terms 60 days prior to the end of any lease. Offer renewal tenants desiring a shorter rental period a higher rent increase and longer terms with a reduced rent increase (or no rent increase). Baron Property Management is not a fan of popular ‘month-to-month agreements’ at the end of leases. Have renewal tenants re-up or ‘extend’ for at least another term of the same length.
2. Charm tenants: Everyone likes to feel wanted. Remembering birthdays or holidays with Starbucks or Amazon electronic gift cards may go a long way towards keeping tenants. It’s also not a bad thing in its own right! I am aware of one property owner who combines the ‘gift’ with something benefiting the house–such as stove filters, magazine subscriptions about homes, free cleanings, etc. Happy tenants tend to stay.
3. Home warranties: When repairs are required, putting the tenant in control of ‘how quickly’ and ‘when the repair/service arrives at the home’ provides peace of mind. Prompt professional repairs also are a reason to stay. Generally, tenants don’t wish to bother you whenever they need a repair if there is an alternative. (Landlords also do not desire calls at odd hours of the night) One main reason why tenants may choose to leave at the end of the lease term is for faulty maintenance. Is it worth losing a tenant quibbling over a 100 dollar repair? Your make-ready will cost you many times more. In fact, most home warranty costs are easily incorporated into the rental expenses.
4. Upsell the long-term option at lease signing. It’s completely fine to drop the idea you are looking for long term tenants.

Severity:

The day will come when your tenants vacate your property. Plan for this early. Here are a few ways to mitigate both the downtime between leases, as well as the renovation costs. The key is to make the process as efficient, and with few surprises as possible.

1. Advertise your unit on (at least one) real estate platform early. A new tenant ready to move in reduces the interim period and thereby increases the value of your property.
2. Contact your utilities and transfer them once the tenant moves out. You’ll need these functional to show the house, as well as perform maintenance.
3. Schedule repairs, maintenance and large renovations. Replace old appliances. The sooner repairs are scheduled the shorter the interim period.
4. Purchase a lockbox. See article on ‘going remote.’ Service people are familiar and responsible. Affords property owners the resource to not be present as they complete their work.
5. If you plan on replacing carpet and painting (Baron strongly urges this as a minimum–this 1x cost should have already been ‘baked into’ the annual lease amount), don’t quibble about minor repairs. It is important to not/not let the tenant know you really won’t sweat the small stuff. Rather keep this knowledge to yourself, and exchange it for benefits the tenant may offer you during the transition. You ask, “What possibly can the tenant offer me?”
6. Ask the tenant to allow new tenants to view the house while it is still occupied. Of course, they are not obligated to do this, but if they are inclined, it only helps you.
7. Ask the tenant to allow repair personnel to inspect the house. Also, schedule a pre-inspection about 30 days prior–giving the tenant a copy the original checklist. If you give them the checklist, they may begin fixing some of their repairs early.
8. If dogs were allowed, and you collected a dog deposit, consider a conversation with the tenant to clean the carpet or tile with the deposit. Often, the tenant is so busy with moving they will agree. In so doing, you now control the quality and timeframe of this repair–as well as how it will be spent.
9. Estimate the current and future utilities amounts owed by the tenant which have not yet been billed. Reach an agreed price for their repayment. This calculation will be used for the final balance. Reach an agreed price for tenant-owned repairs. If you can pay the outgoing tenant their security deposit on their move out date, this will also incentivize the tenant to ensure the house is in top form. It also gives you a bit of leverage for the final inspection.
10. The disaster cometh: You need to make an insurance claim with your carrier. Keep in mind that carriers consider ‘hard-living’ different than vandalism-which is intentional destruction. Insurance Carriers only consider the former a ‘trigger’ for a covered loss. Example: Hard living resembles extreme normal wear & tear. It may include broken sink/toilet fixtures, defaced cabinets, crayon marks on walls, human/animal wastes on surfaces. On the other hand, vandalism, which is intentional destruction, would include political etchings in glass or spray painting on walls. Consider your deductible to determine whether it is even worth filing a claim. Note: — As the property owner, you should control tenant move-outs by working with them before they become a disaster. It requires a bit of diplomacy and psychology. Offer unstable tenants incentives to leave. Even during evictions, it is possible to gently help them decide to vacate. Is it worth angering non-paying tenants and provide them a reason to destroy your property? If you pay for a U-Haul van for one day, would that reduce your make-ready cost–and get them out sooner?

What are your experiences with make readies? Is there something that might be added to this list. I look forward to your responses.

Baron

As this year comes to a close, how might two electronic payment services be noteworthy to property owners? Also, what are the implications for tenant payments and real estate financing in general? Competition

The steady decline of the greenback

A large bouquet of payment options entered the marketplace in the past years. A trend emerges showing cash, the old trusted standard, competes with more formidable and innovative competitors. Once preferred, real money is rejected by an ever-growing list of vendors, according to a recent article in the Wall Street Journal. Further cementing cash’s downfall, major banks actively discourage patrons from using their walk-up tellers—directing them to their ATMs, home banking and AI (artificial intelligent) driven online chat sessions. Even cash’s conventional uses tipping hairdressers, taxi drivers and splitting dinner bills have found effective smartphone substitutes this year. (Notable exceptions: day laborers, international people, and the underground economy still prefer transacting in cash, I hear. However, as many of them use mobile devices, so I wonder how long this trend will last.)

Cash is was king

“All cash” offers on homes, cars and vacation-stays rarely mean physical cash. If it did mean real money, the associated risks would involve both buyer and seller transporting, storing and counting large quantities of bills and coins. Trust and safety are concerns. Do you recall cashier’s marking your bill with a special marking pen to verify your 20 dollars? How easy is it to over, or underpay someone using currency and coins? What happens when someone in line in front of you pays with pennies or nickels? More to the point, Can one benefit from Amazon or eBay services using only cash?

The year 2018 witnessed virtually every social media platform and smartphone platform enhancing its signature payment method, crowding out both traditional- and in-store/credit cards. These convenient payment services provide subscribers many rewards such as tailored marketing, cost-saving promotions, and discounts, but also byproducts such as data collection, GPS tracking and, unfortunately, re-selling (or losing) this data to others. Are the benefits worth the costs? This author says, yes. However, let the ‘buyer beware.’ That said, this past year’s media highlighted risks and rewards of individual’s stored, cloud-based preferences (and other personally identifiable information) by private companies.

With the aforementioned disclaimer stated, banks, and the banking system are notably late to the game. However in the realm of electronic payments, they possess obvious advantages. Like social media, they hold personal financial information. Banks and financial services are historical experts in moving and transferring money. In an effort to avoid being eclipsed by the broadening reach of Silicon Valley alternatives, two key players, Zelle and PayPal made considerable advances. For non-cash accepting landlords, and other real estate professionals, their contributions to 2018 provide a glimpse into what just might be the direction of digital transactions.

Both Zelle and PayPal offer a no-cost version of their services. They both updated their platforms showcasing easy mobile friendly billing and payments–for both the sender and receiver of funds. Both also send informative and streamlined text/email messages notifying users of incoming funds.

However, in 2018 their enhancements differed in the following ways:

• Zelle, approaching ubiquity in the United States, becomes the most popular electronic payment service — albeit largely unbeknownst to its underlying subscriber base.

The group of banks which formed Zelle automatically enrolled all account holders. Also, smaller banks and credit unions similarly quietly added their members to this service. This game changing move created a situation where nearly everyone is a Zelle user. What this means is that most people can send and receive Zelle payments without doing anything. If a person bank somewhere, (anywhere), Zelle is likely one of the account perks. It’s only a matter of learning how to use the service. Tenants may withdraw funds from their Zelle account and send money directly to your bank account—with the ‘restriction free’ deposit showing in your account instantly. Automatic enrollment may indeed surprise most people.

• PayPal ups it game providing free instant deposits and transfers to linked bank accounts — (usually 2-6 hours instead of 2-3 business days)

Seeing the writing on the wall, PayPal recently enhanced non-business account holders ‘same-day’ deposits to linked accounts. Formerly, it charged a fee for this service. Unlike Zelle, PayPal subscribers keep a ‘balance’ in a virtual cloud account. PayPal is competition for ‘unbanked’ individuals since it is free, quick (at most 7-11 stores) and minimal setup documentation is required. PayPal’s virtual account regrettably fails to provide the depositor interest like a bank, but account funds may:

A. Load a pre-pay PayPal Debit Card
B. Pay a friend (although, this friend must also use PayPal)
C. Initiate a one-way outgoing transfer to linked Bank Account. (*now received by the linked bank within hours during M-F)
D. Pay for online services (such as Skype)
E. Pay for physical retail purchases in stores like Home Depot
F. Transfer instantly to another PayPal user

The virtues of instant deposits to linked accounts make this service an attractive alternative to both cash and checks for property owners. Formerly, PayPal charged a small fee for this instant service. I never paid it, since it was okay for me to receive funds in their usual 2-3 day service. Now that instant deposits are the default option (free), I see updated deposits into my bank account from PayPal 2x per day. Faster is better, and welcome!

• PayPal purchased Venmo

Venmo is hugely popular with the younger demographic. Splitting rents and dinner costs are just a few of Venmo’s core competencies. Venmo introduced a free pre-payment Master Card this year, making it a competitor for both the physical and online marketplaces. Now wholly owned, PayPal becomes an attractive option to receive payments. Property Owners: If you plan on leasing units to multiple tenants- or younger tenants, Venmo offers you the flexibility to send, (view) and receive partial payments. Millennials know and use Venmo. For this audience, what could be easier than texting money? In the coming year will Venmo’s hip-hop appeal, social connectedness, and feature-rich ecosystem prevail with its new parent, or, might PayPal force slow conformity to its new acquisition?

• Everybody likes lightning speed, and Zelle becomes the reigning champion

Incoming Zelle deposits materialize faster than any other service, full stop. The transfer speed is instant. Combine this speed with the fact there is no initiation or ‘setup’ will simultaneously wow the naysayers and convince the new converts.

As a remote property manager, how do vendors know via the phone or email they will receive prompt payment from a voice at the other end? Here’s how these payment options allow me address this issue: I inquire contractors and handymen whether they accept PayPal or Zelle. Most have never heard of Zelle. Some know and but few accept PayPal. With only knowledge of their mobile number, I send them a test ‘dollar’ from my bank to their account. They receive a text message to their smartphone, and a link with Zelle’s information showing affiliate banks. Within a few seconds, after following prompts, they confirm an unrestricted, hassle-free deposit — into their bank account — without no further sign up or downloads .

When one manages properties remotely, hiring and satisfactorily paying individuals via phone becomes a crucial component to saving travel expenses. The Zelle platform builds trust between you and your contractors by allowing you to both to confirm receipt of payment before the phone conversation is over. (PayPal works in the same way, but both users must already have an established account.) Express, instant payments equally please tenants expecting security deposit refunds, or other fees–when you can not be present. No more ‘check’s in the mail’. Using text messages, it is possible to send a photo of the ‘payment sent’ email to those who are owed money, thank them, and ask whether they received funds on their end.

Here is a quick and dirty Zelle/PayPal comparison:

PayPal allows free bank one-way incoming transfers from tenants. If the tenant has an open account, the incoming funds are also unrestricted. If it is restricted, then PayPal notifies the landlord by email the number of days before it is released. Unheld funds allow landlords to quickly move rent payments, without dollar limit, to a linked-account.

One caveat, one double standard:

Full Disclosure: I am a non-business account holder with PayPal. As of this blog post, sending outgoing payments on Friday afternoon does not reflect on bank account until Monday morning–creating floating funds for 3-days. My tenants also learned this feature, and I’ve been noticing an uptick in Friday payments. All outgoing PayPal payments post to my linked account the following day. All self-initiated transfers from my PayPal account balance (also known as ‘deposits’) post to my linked bank account within 3-12 hours instead of 1-3 business days (never weekend/holidays). I receive (incoming) transfer payments faster, but my debts still take at least a day to clear. Noting the hugely advantageous double standard wherein incoming funds arrive sooner than outgoing funds, I imagine that harmonizing this discrepancy is only a matter of time.

Both PayPal and Zelle are free services. Their recent 2018 enhancements keep them in step with their social media counterparts. Speed, ubiquity, and ease-of-use are their strong suits. Also, this year, banks and banking services did better in protecting their account holder’s personally identifiable information. Also, since they are regulated financial institutions, these two services have robust dispute resolution options already baked-into their services. An area for improvement would be for them to offer more robust business accounting options for end-of-year reconciliations.

Since I already use a bank, signing up for them both of them was easy (in the case of Zelle, I did not have to do anything). I’ve included Zelle & PayPal in my leases, and if the law allows, eliminated cash and check payment options.

I welcome your comments. What are your experiences using electronic payment services?

As always, with regards, Baron

One of the more creative analogies about our interconnected world describes how a leaf falling in one part of the world affects another part of the world. Economic actions do not differ.

Slow rising interest rates damper home purchases with many traditional home buying groups ‘stuck’ in a holding pattern, for now.

Help, I’m stuck in my starter home!

This effect on real estate comes as no surprise. However, its effect causes ‘potential’ buyers to remain in their existing homes. Occupied homes elude ‘first-time’ buyers, who face increasing prices. Perhaps the most significant reveal in this podcast argues that home ownership is more profitable than salaried employees in many markets!

On the other end of the home-buying spectrum are older families unable to downsize into smaller homes. They similarly wait until refinance rates make their sale and purchases more economical.

Finally, new home builders construct only townhomes as this segment of the market grows–at the expense of smaller and larger homes.

On the bright side, two ‘winners’ from this trend are: remodeling companies, and property managers with rental properties. Families ‘make due’ in smaller dwellings, with minor modifications. As mortgage companies tighten their lending standards, fewer people qualify for larger homes in nicer neighborhoods, resulting in a tighter leasing market in these areas.

From my vantage point, I’m seeing renters more willing to sign longer lease terms not being ‘as sensitive’ with modest rent increases. My hope remains that both renters and property managers come out ahead in this environment.

I would welcome any comments you have about this, or other blogs on this site.

Baron

A connected home would be incomplete without an accompanying smart device. Most internet of things (IoT) devices suitable for landlords are permanently affixed to the house awaiting activation by: a smartphone, web app or other remote device.

Landlords must learn a variety of apps to control these devices. Once learned, these apps are updated and revised-sometimes adding greater functionality.

Currently, Google, Apple, Amazon, and Samsung use proprietary ecosystems limiting interoperability between them. Other open-source systems such as Zigbee and Z-wave often require a ‘not-so-friendly’ hub device to connect and activate compatible systems. Does the smart market offer an ‘easy to use’ device for everything? Also, wouldn’t it be even better if that device too was permanently attached to the home?

Enter Brilliant. It is a mini-computer disguised as a 2-panel switch.  Unlike its rivals such as Amazon Echo, it permanently attaches to the home and operates much like a regular switch. For the newby non-technical person, this last feature is critical. For the smart home connoisseur, one device to remotely access all (or many) of the tools from one physical location is vital.

One feature I plan to soon blog focuses on what extent landlords might entice tenants by offering homes with Netflix accounts, Sonos Music Libraries and remote functionality (including alarms and cameras). I am intrigued by this possibility and will attempt a trial run during my next rental. Watch for the next blog.

One drawback is evident, for now. The wall-mounted device appears to be frustratingly difficult to set up. Some of its functionality remains limited. That said, property managers interested in using remote management tools will find this device as a potential solution. Doubling as insurance when the home is vacant provides extra security and first-warning benefit.

Always remember another downside: If your properties become ‘smart,’ reliable wi-fi and constant electricity service must always remain functional.

Baron would be interested in your comments.