A nation of renters.

In a post today from CNBC titled, “US risks becoming a nation of renters” they discuss a comment made to them by former Wells Fargo CEO Richard Kovacevich that “the United States is at risk of becoming a nation of renters because of the ‘totally unnecessary’ constraints that continue to prevent lenders from giving out mortgages.” He then points to two causes: Dodd-Frank financial overhaul act and the need to loosen restrictions on banks to allow them to buy back faulty loans from Freddy Mac and Fannie Mae.

Of course new regulations had to be put in place – we all heard ridiculous stories about housekeepers making $20/hour buying $450,000 homes financed at 100% of their value. That was a bit crazy. However, in the last five years have you tried to get a mortgage? It’s quite a bit  different that the boom-times of 2007. I just had one of my homes refinanced at the end of 2013 and it took us about 4 months to complete (I blame my bank for at least one of those months). It was a painful process of appraisals, documents, certifying the documents, and much more.

Where is the middle-ground? Is Dodd-Frank too much? Are we really becoming a nation of renters?

 

What is your time worth?

Leaking faucet, clogged toilet, faulty switch…..the list of items that frequently need repair at my rental homes goes on and on. How do you determine what is something you should fix versus calling someone?

For me, I have evaluate my personal situation every time an issue comes up. I may be out of town or busy with other work and therefore be quick to call a plumber or electrician, but normally I try to make most repairs myself. First, I determine the urgency by making sure the repair is not detrimental to the tenants then I consider the further impact the issue may be causing the home. If the urgency is relatively low, I plan to go after-hours during the week or on the weekend. However, with time and experience, I have started to question the value of my time. What am I really giving up to drop everything at 6pm on a Tuesday? My son’s baseball game? A networking event for my full-time job?

Perhaps I am getting lazy, but as I reflect on this, I have found that in the last two years, I have fixed less and less myself and called my plumber more often. Maybe its reflective of the economy but I recall digging a 4 foot deep hole in the front yard of one of my yards in 2009 to cut open the sewer main to clear the line because the plumber estimated it would cost me $2,500. No thanks! A $100 camera rental, $10 in PVC, and 4 hours of digging and the problem is solved. Honestly though, I’d rather not do that again….ever.

So I ask, what is your time worth? How do you determine when to dig or when to call the plumber?

Keeping tenants happy

I was surprised yesterday by a photo that was texted to me – my tenants, an Atlanta couple, sent me a pic of them with their newborn daughter in the hospital. It occurred to me that I must be doing something right if my tenants think enough of me to send me one of the very first pictures of their newborn….via text!

What does it take to keep tenants happy? I cannot pretend to have the secret sauce here, but I do go out of my way to remain as responsive and flexible as possible regarding everything while consistently respecting and sticking to our lease agreement details. When something is broken, I typically show up myself or have a specialist calling them immediately. I make myself available by phone, by email, by text, and more.

What could I do better? A lot, I think. I learn a lot from every new tenant relationship…..after 14 years of landlording I should be a lot smarter! Nevertheless, I work to make my tenants happy and I continue to wonder….How can I improve?

Any suggestions?

 

Paying rent with Bitcoin

I had an interesting conversation this week with the team from Bitpay about possibly partnering with RenterUp’s payment solution to allow tenants to pay rent via Bitcoin. Bitcoin is very interesting through a payment processor like Bitpay because the transaction happens so much more quickly than ACH because the funds don’t have to go through a central bank. Additionally, the landlord has the option to receive only US Dollars (assuming that is the preference) and would therefore have no need to worry about any conversions or weird accounting journal entries since all of this is handled by Bitpay.

Without doubt, the community of people using Bitcoin is growing – at the time of this writing, there are 12,760,375 Bitcoins in circulation (worth ~$5.7B US Dollars at 446 BTC per $1USD) and the number of Bitcoins in circulation has been consistently increasing at just over 1.1% per month (14.4% increase from May 2013 to May 2014). As the number of Bitcoins in circulation continues to increase, the volatility of the currency will settle down and therefore make it even more attractive to have and use.

Certainly the community of people that might have Bitcoin and be willing to pay rent with it is minuscule today, but when you look at it more closely, I think it is quite interesting. I look forward to watching what happens as it continues to mature and gain adoption.

Do you have Bitcoins? Would you pay rent with it? Why? Why not?