If you live in the US, you will do this 11.7 times in your lifetime. Usually once every 5 years.

If you live in the US, you will do this 11.7 times in your lifetime. Usually once every 5 years.

A mini moment of truth

Again, In the United States, Census Bureau estimates that 15% of American families move every single year.

During moves, property owners fear the worst damage will be uncovered. Conversely, the Tenant fears charges for which they did not cause. Property owners consider how to reduce the transition period between moves. Tenant’s concerns focus on moving their effects, and returning back the unit, receiving their security deposit, and moving on with life.

Since moving occurs regularly, the frequency of being a tenant, or a property owner/manager managing a tenant is not uncommon. The purpose of this article is to provide a few tips for both groups to demystify convention and in the process making the process smoothing out the process. Because it is both exciting and deeply personal moving is a mini moment of truth.

Knowledge of ‘The End’ is an often overlooked revelation.

When lease terminates on schedule, this makes everyone happy. Tenants and Landlords appreciate wiggle room allowing them to move up (or down) the final date if it is in their interests. Start preparing 45-60 days before you depart.


-Arrange for all effects to be out, 24 to 48 hours before the deadline. You will feel better. Allows you not to rush.

-Cancel all utilities, forward-cancel mail.

-Provide the property manager more than one day/time for a final inspection. Obtain a written verification of the final state of property on move-out-day (& keep this for your records)

-*Bonus: Request repairs of the property manager of items 45-60 days before departure. They will (usually) not refuse., and it keeps these shortfalls from reducing your security deposit repayment. Also, requesting self-applying touch-up paint for those wall-hangings may be advantageous for all parties.

Property Owners/Manager

-If the lease has a termination date, no need to notify tenant. However, if you’re envisioning a rent increase, or new residency rules/requirements, a lease extension & 30-day notice (in most US jurisdictions) is required.

-Terminating Tenant’s utilities should transfer to you at lease end. This includes notifying Home Owner’s Associations if this applies.

-Provide the tenant a copy of the ‘room-by-room’ check-in sheet 45-60 days before lease termination. This allows both parties to be ready for the final inspection. Be ready to negotiate. Don’t sweat the small repairs/stains.

-*If your tenant agrees, arrange for them to conduct ‘  next tenant. Also if your tenant agrees, have workers begin assessing and performing ‘make-ready’ work.

The cocoon phase

Just because the house is vacant and dark, it doesn’t mean anything is happening. Landlords make preparations (& upgrades) long before the next occupant signs a lease.  Renters should also begin looking for a new place, months before they start loading up their belongings. As someone who has moved dozens of time myself, including overseas, here are a few helpful hints.


-Marry the location before looking at the value proposition. Start in out-of-reach neighborhoods/locations first. You never know until you ask.

-Online resources are great, but no substitute for personal viewing. Of course, for shorter stays of one week or less, viewing property/room photos may be practical feasibility. After looking at the best and worst social media reviews, take an outing to place you will live. You won’t regret it. (Among other benefits, a tour introduces you to your landlord, and allows you to determine if your furniture will really fit into and match future room spaces)

-Be prepared to walk away from a property. Also, be ready to make an offer. Having options gives you an advantage. If you do not like what you see, it’s okay to count a personal visit as a ‘learning experience.’ However, it may be that the place is indeed perfect. If so, impress the manager by: 

a. bringing references;

b. Touting credit scores;

c. Dressing conservatively (Sorry. Am I right?);

d. Letting the manager know you (may) take the unit as-is, and can move in sooner rather than later (manager’s generally like to hear these words);

e. Follow up with a nice text/email.

-*Bonus. If the unit especially pleases you, ask for a longer lease term. This nifty earworm, if used,  sets you apart from other tenants, letting the manager know you are serious prospects. 

—Double Bonus. Ask whether the unit qualifies for a month free after 12 months. (the closes mouth never gets fed)

Property Owners/Manager

-Perform the needed, time intensive, upgrades to the unit. Do them simultaneously limiting the downtime. 

-Buy/ Renew a home warranty &/or termite-, lawn service. especially if you manage remotely.

-View online resources showing rental estimates in your area

-Talk to neighbors living near your house, use them to keep an eye on your place while it is vacant (and also occupied, sorry tenants). Provide them your contact info.

-*Bonus-experienced landlords -after functioning appliances, focus on the floors and walls. If you allow pets, replacing carpet and deep cleaning tiles is a must. Consider a separate pet deposit. Window coverings can be quickly installed, and window re-screening takes about one week at local hardware stores.

-*Double Bonus-With SmartHomes now out in the wild consider including basic internet letting the residents configure their own passwords—for liability reasons. Among the many benefits, it provides them text/email capabilities, any provides unimpeded operation of smart locks, thermostats and window blinds.

Decision Day. Do these early, and often.

In the past, managers and tenants completed the rigors of credit reports, criminal history, rental history, and income verification before committing to a lease term. Airbnb (and other services) substantially streamlined this still-used process by pre-screening, obtaining upfront funds, and allowing the parties to view the other’s rental history. Regardless, both landlords and residents should know the following lease signing.


-You should consider low-cost rental insurance. It protects your effects, and may also protect you from paying from liability from accidents during your rental period. 

-Complete and return the ‘check-in’ sheet early. If it is a short-term rental, notify the owner of all defects immediately.

-The first 30 days should go smoothly, but may also require some maintenance request. Observe how responsive this first request is resolved. Be flexible. Provide yourself and the LL options in case it does not go as smoothly as it ‘could.’ If it is resolved quickly and amicably, thank the LL for his response. (This will go a long way when the next request comes.)

-*Bonus. No matter how ‘perfect’ the place is, you will likely have a few suggestions after you move in. Upgrades that will give you a spark of joy, and can be undone upon your departure, are worthwhile. Unless the lease specifically precludes otherwise, by all means, embark on these (if they do not leave permanent marks)—making certain you let the LL know, and undo them to the satisfaction of both parties). It’s your place. You should feel at home.

Property Owners/Manager

-If you rented to someone one month, hesitate to perform your ‘inspections’ the next month. If you have a ‘reason’ for an inspection, it’s best to limit them unless absolutely necessary. If your presumption is wrong, the now-wary tenant will no longer be on your side, and not appreciate the ‘intrusion.’ Instead of an inspection, send them a friendly one-sentence hint/suggestion when giving them a receipt for the rent. Give as much notice to the tenant when you make inspections, offering them a choice of days/times.

-The house will be modified by your tenant, even if you rented to what you believed were ‘ideal’ tenants, and there may be a reason for this modification. Get over it. Instead, save the conversation for the final move-out negotiation. (or better yet, acknowledge it, and ask for tenant concessions elsewhere — especially allowing future tenant viewings or repair work while the unit is occupied). 

-Your goal is to have the tenant resign a second year. Most property managers break even after the first year and only reach profit after month 10. Your make-ready costs for repairs and the ‘down-time’ between rentals will easily devour the cost of small repairs. *Bonus: In the worst case scenario amortize a large repair over the next 12 months.

-Bonus: Nothing prevents you from not renewing with an existing tenant at lease termination. If you are friendly during the final 60 days, it will save you in the long run.

—Double Bonus: Evictions are hugely inconvenient. If the tenant won’t pay (the usual cause). You’ll need to keep good records, hire an eviction attorney, and be prepared to have them remain in your house for months longer than wanted. Instead of fighting them, another strategy is to ‘forgive’ all/or some of their late rent in exchange for leaving the premises. Yes, these situations involve you taking a personal loss. However, if they go under these circumstances, it is often a win-win.  You receive your unit in better condition and can begin to view a horizon where the cash flow is positive again. **If your tenant is going through unexpected financial difficulties, they probably feel bad.  Any small gesture may make you feel good about yourself. 

Interested in Safe Harbor? Start 2019 on the right track

The following changes in the Tax Cuts and Jobs Act (TCJA ) may provide property owners with a significant advantage under section 199A – qualified business income deduction. It applies to this filing season (2018) and continues through 2023. Property owners/ managers may exercise this benefit known as ‘safe-harbor.’ Certain ‘safe-harbor’ business records requirements are waived for this first year.

What is the benefit? A twenty percent (20%) deduction for ‘pass-through’ qualified business income.
For property managers anxious to dive in head-first, read on. Also keep an eye out for further guidance from the IRS. (link)

That said, the following are a few things to get you started:

a. Before e-filing, verify compatibility with the tax software you’ve selected. As of the writing of this article, some commercial software is in the process of incorporating this deduction. (Ah, the beauty of technology to make 11th hours critical adjustments instantly!) For manual filers, ensure your bookkeeper or off-the-shelf software is aware of the new 199A provisions.
b. Determine whether your rental(s) will be considered by the IRS a ‘real estate rental’ This is something that could matter – greatly. The IRS does not require your rental(s) business to be incorporated for this distinction. The deduction is generally available to eligible taxpayers whose 2018 taxable incomes fall below $315,000 for joint returns and $157,500 for other taxpayers.
c. 250 management hours is the magic number you need to rise to the level of a ‘safe-harbor’ business according to the IRS (link). This requirement goes into effect next year, however. Document, Document, Document. Starting now, track hours spent by asking vendors to notate their hours on services performed on each property. For the most current list of qualified ‘activities’ see the IRS website. (link).

c1. Here is a list of what qualifies:
(i) advertising to rent or lease the real estate;
(ii) negotiating and executing leases;
(iii) verifying information contained in prospective tenant applications;
(iv) collection of rent;
(v) daily operation, maintenance, and repair of the property;
(vi) management of the real estate; (vii) purchase of materials; and
(viii) supervision of employees and independent contractors
c2. Here is what type of records you need to keep:
…….contemporaneous records, including time reports, logs, or similar documents, regarding the following:
(i) hours of all services performed;
(ii) description of all services performed;
(iii) dates on which such services were conducted; and
(iv) Who performed the services. Such 8 records are to be made available for inspection at the request of the IRS.

c3. An attached statement accompanying your taxes:

The text of this affidavit, according to Notice 2019-17 (Revenue procedure for safe harbor)

.06 Procedural requirements for application of safe harbor. A taxpayer or RPE must include a statement attached to the return on which it claims the section 199A deduction or passes through section 199A information that the requirements in Section 3.03 of this revenue procedure have been satisfied. The statement must be signed by the taxpayer, or an authorized representative of an eligible taxpayer or RPE, which states: “Under penalties of perjury, I (we) declare that I (we) have examined the statement, and, to the best of my (our) knowledge and belief, the statement contains all the relevant facts relating to the revenue procedure, and such facts are true, correct, and complete.” The individual or individuals who sign must have personal knowledge of the facts and circumstances related to the statement.

The contemporaneous records requirement will not apply to taxable years beginning before January 1, 2019.

d. Along these lines, immediately prepare separate subfolders for each property within your email client. Drop all correspondence, bills, leases, reports and other activity into each subfolder. Take photos of paper bills and drop these into the electronic folders. Retain all e-receipts and contractor/tenant correspondence. Suggestion: Re-label / Re-index the subject lines of these documents, noting: a. Your hours spent, b. Type of issue, and c. Payment amount. It is possible to keep electronic ‘e-mail’ in place of hard copy folders–be diligent to ensure the records are complete.

As of the writing of this article, it might be worthwhile waiting for your commercial tax software to update your information to take the pass-through deduction this year. Since the recordkeeping requirement begins next year (2019), let me know whether this was helpful. Also drop me an email about your record keeping efforts.

Landlords:… And the most popular tech holiday gift for 2018 is…

‘Addictive,’ is the term used by one columnist to describe this trend. It should come as a no surprise. The 2018 winner is: Smart Home devices.

So far this year 19 million smart speakers have been shipped, and the season is not yet over. (Full disclosure, Baron Property Management specializes in technology for landlords.) Other Smart Home devices are projected to top tech holiday sales this year making Smart homes officially ‘a thing.’ Currently, home-tech owners desire to purchase more and newbies plan on gifting these devices to their loved ones.

What are some ways to leverage this trend as a landlord? First, just knowing there is broad interest this year itself provides property owners a ‘reason’ to investigate and consider purchasing your first device. Your tenants probably have interest. Installing home automation will: peak their interest, make your property more attractive to prospective tenants, and possibly even help in retaining them during lease renewals. Introducing the most basic home tech may keep your residential unit from becoming irrelevant in competitive property markets.

OK. So much for the sales pitch. Now here are some practical steps.

For landlords new to smart homes, I suggest basic lighting to start. Several are available. Tenants control these items using their smartphones. Some do not require a hub or even an internet connection. When showing a home to tenants, managers may provide convincing tenant demonstrations. Only a smartphone and the device is needed. Bulbs may be purchased from any big-box retailer (or Amazon) and require just replacing them into an existing socket.

For property owners having some knowledge and experience, perhaps upping your game to the next level would include a smart lock or doorbell. (Regarding the doorbell, this device will most likely become extinct since most Millennials announce their entry via text).

The best landlord tech works even without being smart. Many smart locks also have a physical key in addition to the remote control. Many smart lights usually operate using a conventional wall-mounted switch. Additionally, smart-doorbells look and work just like regular ones. Those extra remote features (such as cameras & speakers’ added protection of parcels on the porch and driveways from would-be-thieves – do so without owners/tenants needing to do anything extra). One smart doorbell manufacturer broadcasts a C.O.P.S style production showing crimes in progress!

For veterans to home automation, one real estate professional suggests property owners provide tenants ‘access’ to music and movie subscription services, in addition to offering a separate paid-for Wi-Fi account. Consider preparing move-in ready properties complete with connected speakers, 4K televisions and streaming boxes.

Regardless of your skill level, it is crucial for landlords to clearly ‘transfer’ autonomous control of these devices to the tenants when the lease begins. Also, Baron never recommends sharing Wi-Fi accounts with tenants for similar liability risks. (instead, landlords should pay services fees for ‘tenant-maintained’ wi-fi. Like another paid utility, the wi-fi should operate 24/7 in some cases)

A recent article from a real estate site provides an excellent overview of home tech for landlords. The criteria for each property owner differs. Steps include:

*Specifying how you want smart home devices to improve your rental
*Selecting the right equipment (s)
*Deciding how the tenants will control the device(s)
*Knowing how you will connect to these devices – and when
*Benefits of a Smart Home

However, the main categories are:

1. Access control/surveillance during periods of vacancy. (Interior cameras, leak detection units, locks, security systems)
2. Providing a tenant benefit or retention tool. (light bulbs, speakers, TV, entertainment subscription services, door bells with exterior facing cameras/speakers)
3. Control home features remotely (lights, HVAC, mini blinds, water sprinklers)

A definite recommendation before purchasing any home automation tech involves performing a cost-benefit analysis of what you may need. Also, recommended is staying away from any tech requiring a subscription after your initial purchase. Some individuals shy away from devices collecting personal information. Finally, for items which the tenant will control during occupancy, clearly delineate the subject and any costs in the lease agreement.

My favorite item for 2018 is a (non-Alexa enabled) $60 bathroom fan sold a Home Depot. It functions just like most hard-wired ceiling fans controlled by a wall switch. However using Bluetooth from a cell phone (no-Wi-Fi needed), occupants can broadcast their Spotify or music subscription service through a fairly decent speaker. It also illuminates the entire bathroom with blue light for late nights when the standard white light would be irritatingly too bright. After installing this Smart Home speaker in my home, I’ve also installed two additional units a ‘lease-renewal’ benefit to the delight of my tenants.

I welcome your comments and suggestions.

Happy Holidays
Baron Property Management