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By Robert L. Cain, Copyright 2022 Cain Publications, Inc.

PROPERTY NEWS SERVICE

Financial disaster looms reports Susan Tampor in a Dec. 22, 2021 article in the Detroit Free Press. Two senators and  a representative in a Dec. 8 letter to President Joe Biden called it “alarming new information.”  Another senator, Joe Manchin, warned of “a big hole in financial safety.” And the Detroit Free Press in the same article also warned that “families face financial challenges .”

The result could be unpaid rent, wage garnishments, and auto repossessions by late Spring or early summer for the 36 million households that receive the child tax credit.  The double whammy comes from the end of student loan forbearance on May 1 and the loss of the child tax credit.

Here’s how it can end up a serious problem for the US economy.  The total hit could mean $837 a month for those who have both student loans they aren’t paying on now and the end of child tax credit.

Student loan payments average $393 a month. Some pay more and some less, but that’s the average.  Child tax credit means an average extra $444 monthly in the pockets of parents.  Both the student loan forbearance and the child tax credit were put into place as part of the CARES Act.  They both face deadlines with the result that families could end up in the hole every month.

With Student loan repayments with 41 million borrowers resuming May 1 and the child tax credit that ended Dec. 15, their canceling can throw a monkey wrench into the economy.

The bigger hit faces student loans in default.  CNBC reported on Oct. 8 that “because along with their wages and Social Security checks, those who’ve fallen behind on their education loans can have their annual tax refunds seized by the U.S. government. This can cause people to also miss out on the child tax credit and the earned income tax credit since those are usually paid out in tax refunds.” Those total some 9 million, that’s half, of the 18 million student loan borrowers, reports a March 24, 2020, Washington Post article.

Let’s look at how that could affect so many Americans. The Bureau of Labor Statistics reports that the median wages and salaries are $4247 a month. Subtract taxes withheld of an average $2988 per month, and net income lowers to $1267.  Many families have two incomes. That makes a net monthly income for the household of $2534. For the sake of this discussion, I doubled that, figuring it close enough to make the point. Rarely are both spouses earning the same amount with women often earning less.

Now we subtract outlays. Figure average transportation costs of $813 a month per the Bureau of Labor Statistics; that includes car payment, gas, maintenance, and insurance, plus a couple of lesser costs such as public transportation.  

The average student loan payment reports the US Department of Education in $393 a month.  If both adults have student loans, double that to $786. 

Thus we have $2534 less $813 less $786 leaving $1328. They still haven’t paid rent. The median monthly amounts to $1104. That leaves $224 a month for food and to take care of children.  That’s not to mention utilities, eating out, credit card payments. and such “necessities” as the cable bill.

It gets worse. Some $70 billion of back rent owed by 10 million people eagerly waits to result in evictions because tenants simply don’t have the money. Those rents accumulate and add interest making it even more difficult for those receiving the child tax credit and student loans in forbearance when they have to start paying them.

Add back in the average $444 for child tax credit and student loan forbearance and things look better. It bumps up the average income to $1061 a month, enough for food and maybe a dinner out, the electric bill, and clothes for the kids.

Who doesn’t get paid? The biggest expense is usually rent.  Depending on the landlord, paying the rent might be delayed for some time. The expression “understanding landlord” in the Bad Tenants’ Dictionary means one who isn’t too insistent on payment of rent.  An “unreasonable landlord,” meanwhile insists on timely rent payment. Thus, depending on which landlord they have, they can beg off paying rent or look for another bill to put off paying. Maybe the car payment, the Visa bill? No matter what, someone won’t get paid.

Will these dire circumstances all come about? Maybe, maybe not. If student loans get forgiven or forbearance extended again, and Congress passes an extension of the child tax credit, things will stay the way they are now, for a while at least, for families who depend on the child tax credit and owe student loans. Secretary of Education Miguel Cardona stated, “As we prepare for the return to repayment in May, we will continue to provide tools and supports to borrowers so they can enter into the repayment plan that is responsive to their financial situation, such as an income-driven repayment plan.” There’s no way to predict exactly what will happen.  But the result of student loans becoming payable again and of the child tax credit going away can result in numerous evictions, car repossessions, evictions, and employees unable to get to work.  We must prepare ourselves for the possible financial disaster.

propertymanagment #rentals #landlord #rentalproperty #renting #landlords #getitrented https://www.amazon.com/dp/B072JHCPM8

By Robert L. Cain, Copyright 2021 Cain Publications, Inc.

PROPERTY NEWS SERVICE

Smart and experienced investors plan thoroughly.  Because they have been doing it for so long and so successfully, they have a list, possibly just in their heads, of issues that can pop up with any property they might consider buying.  A search of the internet and the numerous books I have on the shelves in my office comes up with the usual advice about choosing a property.  They are all valid, excellent, and important factors to consider: Inspect the property carefully, check the rent rolls, look for hidden problems, and so forth.  But these experienced investors do even more.

The difference between that advice and what I’m going to discuss here has to do with what surrounds the property.  I’m going to deal with the monsters and assorted creepy critters lurking down the block, inside school district offices, and city hall waiting to pounce on and devour real estate investors.

These issues may be difficult to foresee, but are often discoverable with a little research and keeping up with local news. 

The drug house next door

Smart investors survey the neighborhoods around prospective properties.  That, of course, includes neighborhood crime statistics and the ownership and management of nearby properties.  Unfortunately, few of us have crystal balls that allow us to see where a neighborhood might go in a couple of years even though everything is fine now.

Then a nearby investor sells an apartment building, gets a new manager, or simply stops paying attention and, presto! in moves a drug dealer or two along with the druggy tenants eager to live close to their crystal meth supplier. 

A drug house can decimate a neighborhood.  And they can appear even in what seems to be the most stable of neighborhoods.

The disappearing school

Many cities suffer from declining public school enrollments, often not even for all the same reasons.  Smart investors carefully check out the school districts and the schools around their prospective investments.  After all, good schools draw parents who want their children to get a good education.  Most likely, that correlates with responsible parents who will likely be better parents than the parents who think of schools as someplace to babysit their children to get them out of their hair while they sit in the bar, smoke dope, and wait for their welfare checks.

School boards sometimes make bizarre decisions and close under-enrolled schools combining them with other schools.  Closing a school, especially a first-rate one, can also decimate a neighborhood.

The school morphs into disaster.

Principals and teachers transfer, or are transferred, to different schools every year.  Sometimes a principal who had created an exceptional school gets her just reward and earns a transfer to an under-performing school to work her magic there.  Often those principals take teachers with them, the best ones.  What replaces that principal and those teachers might make the old school less than desirable.

How about an entire school district?  Take, for example, the Clayton County, Georgia, school district that lost its accreditation in 2008.  An entire school district losing accreditation had happened only twice before in 40 years.  Think what that did to Clayton County rental properties.  They regained accreditation in May 2009, but the damage couldn’t be repaired.

A bad school, or school district, does a number on the neighborhood or even an entire county.

Local government engages in government thinking.

It might be a huge increase in property taxes for non-owner occupied properties, a sales tax on rents, rental inspections, or a new fee inflicted upon rental properties. No matter which, it affects the ability of a property to turn a profit.  Rents can only go up so far because they have to compete with properties just on the other side of the city limits that aren’t saddled with those extra costs.  That means investment real estate owners can’t make as much, or any, profit on their rental properties as the rents increase and the vacancy rate follow. 

Of course, then, with vacancies increasing and rent amounts dropping, the money the city anticipated receiving not only disappears but the net receipts decrease. Let the whining begin. But that’s what governments are good at: government thinking. You can’t do just one thing. Every action has consequences, many predictable.

Who would have even dreamt of such things happening?  But there may lurk even more unexpected and unpredictable events, ones I can’t think of now so bizarre and rare that they might happen only once or twice in a century.

Can we think of everything?  Obviously, we can’t.  Can we do something about unexpected events?  Usually. The most important thing to remember about rental property investing is to pay strict attention to everything that might affect property values.  After all, real estate investing is hands-on if it is to be successful.  Paying attention involves more than just scrupulous maintenance and consistent rent collection.  It requires watching out for those monsters and creepy critters waiting to negatively affect our investments.

How you create goals makes all the difference

By Robert L. Cain, Copyright 2021 Cain Publications, Inc.

PROPERTY NEWS SERVICE

How will you know when you are successful? If you believe you are now, how do you know?  Most people, landlords included, simply cannot point to an accomplishment and state positively that they have been successful. I know just about every landlord had visions of being successful when he or she bought that first rental property. Success still waits for every landlord to grab and run with it.  And you can snatch success or restart it in the next month. So get ready to set New Year’s resolutions that might encourage success. Details forthwith.

Because of my insatiable curiosity, I did a search for landlord New Year’s resolutions. I came up with three or four websites that listed at least 10 each.  The goals in each were remarkably similar even if worded slightly differently.  All were aimed at getting landlords to do the things that will make them successful in their businesses. But they don’t provide the final but essential step to accomplish those goals.

We are to “cut costs” and “watch cash flow.”  We are to “get better tenants” and “screen better.”  We are to prepare a maintenance plan and schedule maintenance.  We are to “get organized.” We are to “get rid of bad tenants.” We are to “enforce late fees.” We are to “increase rents.”  Fluff, fluff, and more fluff. Here’s why.

Each of these goals appears worthwhile.  But they are fluff.  Two more, which rank as fluffiest, were “be proactive” and “focus on the long-term.”  Huh?

The essential part of any resolution or goal is an objective, measurable result so you can tell when you have accomplished it. You can point to it and say, “I did it!”  That is not possible with any of those fluffy ones I found on the websites and listed above.

Of course, none of these websites could provide actual measurable goals because rental property success is measured one landlord at a time, one property at a time.  Each landlord’s success is unique to him or her, not to some overall, generalized goal such as those the websites listed.

Let’s take one or two of these goals and see how to put them into practice so they can be measured.

“Get better tenants” is a broken record to many landlords.  We all want the best tenants possible renting from us.  Okay, how do we know if Richard Renter standing in front of our desk with a rental application mostly filled out (except for the landlords and addresses where he’s lived that he “doesn’t remember,” of course) will be someone whom we would accept as a resident in one of our rental properties? Would he be a “better tenant”?

Since each property is different, attracting different qualities of applicant and tenant, we can’t make a blanket assumption of the classification of “better tenant.” That requires carefully crafted rental policies and standards reflecting the demographics of each property that we can use to compare the qualities of each applicant against.  Without those, the judgment of “better tenant” is left to our whim, mood at the moment, and how good a salesperson the prospective tenant is.

Thus, a measurable resolution might be worded, “create rental policies and standards for each rental property that includes minimum income required, minimum length of previous residence required, minimum credit score required, and quality of landlord references, and do it by January 15, 2022.”  Then decide for each property what those are, write them out, print them, and hand them to each applicant, making you ready to measure each rental application against them.

“Get rid of bad tenants” is no question a worthwhile, profit-enhancing goal.  But how do you measure who a “bad tenant” is?  That may be a harder one.  I have had tenants who irritated me and whom I was happy about their moving but who also paid the rent on time and took care of their homes.  Were they “bad tenants”?  Only when I got the notes with each rent check with complaints such as “light bulbs burn out too often” did I think of them as “bad tenants.”  Of course, the evil end of the “bad tenant” continuum is Tina Tenant who hasn’t paid rent on time, if at all, since the first month she lived there and whose boyfriend moved in with her along with his constantly “visiting” friends who have wild, drunken, drug-induced parties every weekend.  Obviously, Tina goes.

But somewhere in the middle is a continuum midpoint for tenants to get rid of and tenants who are simply annoying.  Again, with each property, that cutoff may be somewhat different. and for each landlord; it may be different depending on a landlord’s ability and need to tolerate irritation. But the important point is that each landlord has to decide where that cutoff is. How many times may the rent be late?  How many times do the police have to come?  How much damage to the property must there be?  Answer those questions about each tenant in each property.

By all means, make New Year’s resolutions.  Raise the rent, get better tenants, enforce late fees, get organized, but write down exactly what that means so you can point to success when you accomplish it. No more fluff, only measurable success.  It is your success and you can accomplish it if you know exactly when that success has arrived.

By Robert L. Cain, Copyright 2021, Cain Publications, Inc.

His father warned him, but Josh thought nobody could fool him. As reported by a Better Business Bureau study, when Josh Reiss, 20, got an offer to join an internship program he applied for, he was eager to get going on it. The company sent him a $7,000 check and instructed him to buy a computer, software, and assorted other items, then send the remainder back to the company that “hired” him. Dad said it looked “fishy,” but Josh knew best. He used his debit card to wire $6,000 back to the company.

Of course, the company’s check was fake, as Josh’s credit union informed him when they processed it.  Now Josh owes the credit union $6,000 because he had nowhere near that amount in his account. His father warned him not to buy anything or pay the company anything until he got confirmation that the company’s check was good.  But Josh knew he was too smart to be fooled.

They consider themselves savvy consumers, well-educated, and immune to trickery, but they are the age group most susceptible to scams. Millennials are at the top of the list of people who get fooled by fraudsters, reports the Better Business Bureau study.  Who’d have thought?  Accepted wisdom and the news media say or imply that the most susceptible to scams are seniors, but the data say they come in last for probability of getting ripped off. 

The Better Business Bureau survey found that 83,2 percent of 18-24-year-olds and 81.1 percent of 25-34-year-olds are most at risk for losing money to a crook. People 65 and older are only 73,4 percent, still not good, but lower than younger people just entering the “real world.”  Even so, you’d think by the time someone reaches his or her 30s, they’d have learned to be just a little more cautious about whom they do business with.  In the words of Danny O’Keefe in “Good Time Charlie’s Got the Blues,” “You’re not a kid at 33.”

What is it that makes this demographic more susceptible to getting ripped off by scammers?  It’s the very quality that gives them a leg up in their careers; they think they can’t lose. It’s something called “optimism bias”  or “invulnerability illusion” explains Kendra Cherry in “Understanding the Optimism Bias” on verywellmind.com. It “leads us to believe that we are less likely to suffer from misfortune and more likely to attain success than reality would suggest.

Nothing new there. In 1980, ND Weinstein wrote in an article in Personal Social Psychology that most college students believed they were immune from ever having a drinking problem or getting divorced and that they were destined for positive outcomes such as owning a home and living into old age.  Young people’s attitudes apparently haven’t changed much. And in that respect, it’s a good thing because they are ready to go out and take on the world.

Too bad they don’t temper their optimism with more critical thinking, but they never have, it seems.

Consumer Reports in June of 2018 suggested that five traits can make someone “an easy mark.” 

One is an eagerness for bargains.  Always looking for a “good deal”; they’ll enter contests and drawings, thus giving their information to scammers; open all their mail, including sales materials and charity appeals; and answer their phones thus jacking up their susceptibility.

Two, studies found that fraud victims get sucked in by statements from con artists maybe saying a deal is only good for the next 12 hours or claiming people are earning 10 percent a year on an investment.  That’s a sales technique as old as sales itself. Give the prospect a deadline after which the deal is off. Millennials more often than not don’t have the savvy or critical thinking ability to spot the technique as suspicious and worth careful consideration.

Three, they lack a defense strategy, jumping right into making a decision rather than giving themselves time to check out the person giving the sales pitch and the company.  They also don’t sign up for the “do not call” list and engage scammers on the phone.  Hurried decisions often end up as bad decisions.

Four, they are willing to take risks.  Because they believe they are invulnerable, they buy into a risky investment or product. No research, just belief they know better than the more “cynical” and “negative” of us.

Fifth, they find themselves in the midst of a personal crisis with jobs, family, finances, and other worries.  That doubles the odds of getting scammed, reports a 2013 Federal Trade Commission study.  Coping with life can use up “cognitive capacity” that otherwise would spot a scam. It’s called the Swiss Cheese brain. As I wrote in a February 2009 column, “Prolonged stress kills brains cells, creating ‘holes’ where living, functioning brain cells used to be and rational thought can cascade right through.  Logical thought processes can, in people who have endured months of high stress, be seriously sidetracked into an almost total disconnect with reality.”

What do they tell themselves, most likely subconsciously, when they come across the “deal of a lifetime” or something “too good to pass up”?  “I can’t possibly get screwed,” “I have to trust somebody,” and “they seemed so honest” feed their brains with motivation to buy. One of my favorites, “It was such a good deal, and they were giving away laptops.” Sure it was and sure they were.

Yes, 18-34-year-olds are most vulnerable to being fooled by scammers.  But, their ingenuousness is also what makes them successful; they believe they can “do it,” whatever “it” is. Eventually, as they age and life catches up with them, they will become more cautious and less prone to fraud.  But right now, they are our renters and employees and can get themselves in financial difficulties because of their ingenuousness and optimism bias.

By Robert L. Cain, Copyright 2021, Cain Publications, Inc.

PROPERTY NEWS SERVICE

On your mark, get set, go! The time has arrived to be thinking about where you stand in the race for success next year. It is a race, you know. It’s a race between you and a neighborhood that may be declining or improving. It’s a race between you and properties that always need updating and repairing. It’s a race between you and government and its agencies that incessantly pass laws and create new regulations that not only cost you money, but make it markedly more difficult to earn a fair profit. And finally, it is a race between you and your tenants. 

Between you and your good tenants, the race is to not only keep them as tenants, but to make them such happy customers that the idea of moving will never even be a flicker in their subconscious. Between you and bad tenants, the race is  to get them out before they do too much damage, drive off your good tenants and receive ever more immunity for their outrages from the courts and legislatures. 

How to win the race? Knowing what you have to do to win leads the requirements. John Maciha writes in “The Eleven Commandments of Budgeting,” “Use the budget process to analyze your real estate or property management business. Are you positioned properly for the short range as well as the long range? Are upgrades needed to remain competitive? Do you need to hire more people or get more equipment?” 

First thing you do, then, involves figuring out where you are and where you want to be. What is your position in the market now? Is it what you had planned? 

Sit yourself down and plan what you want to happen in the next year. I always have a problem doing that myself. I can find all kinds of things to do, including Freecell, watching sports on television and sweeping the patio, rather than figure out what needs to get accomplished and where I want to be. My brain dries up. Over the years, though, I’ve learned a few tricks to get my brain primed to gush forth with some pretty good ideas. I’ll tell you about three

Brain fooling trick #1: The 20-Idea Trick 

This one works for me just about every time. I wish I could claim credit for it, but I can’t. I first heard about it from the world-famous motivational speaker Brian Tracy. And I don’t imagine it is original with him. Write down the question or problem you want to find an answer or solution to, such as “How can I attract better tenants?” Now write down 20 possible solutions. It’s called “mind storming.” 

You have to be careful with yourself. Don’t pass judgment on the ideas as you go along, just write them down. Most important, sit there until you come up with all 20. It has to be done in one sitting. No getting up, mowing the lawn, fixing that leaky faucet in a rental you’ve been putting off for a couple of months; stick with it! 

The first four or five will come easily. The old standby ideas come to mind first. The next few will be a little more difficult. By the time you get to 16 or 17, you’ll come up with some pretty good ideas. That’s why you sit there and mind storm until all 20 are on paper. Just watch—chances are you’ll get so many good ideas that it may take several weeks to implement them all. 

Brain fooling trick #2: The 10-Minute a Day Trick

Jay Johnson of Note Finders of America writes, “Zig Ziglar advocates spending 10 minutes a day, immediately after awaking, writing down 10 ways you could become more effective at what you do. 

“Would you spend 10 minutes a day if you were GUARANTEED to accomplish what you want? My bet is NO! Because most people don’t believe that this can work ‘it’s too simple!’ But the magic is that it does work! 

“There’s brilliance in what Mr. Ziglar suggests. First, it will get you thinking about what it is you want. Second, it will get your mind on the ‘right track’ and you will find solutions to obstacles or problems you might be experiencing. Third, you will get a continual supply of fresh ideas. And last but not least, by committing to a daily ritual, such as spending your first 10 minutes focusing upon what you want, you will open pathways to the powerful subconscious mind. The subconscious mind can help you solve any problem or overcome any obstacle.” 

Brain fooling trick #3: The Play with Numbers Trick

Nothing more than basic goal setting, figure out where you want to be financially at the end of a year, five years, ten years or whatever. Write the figure down. 

Now comes the more difficult part, break the figure down incrementally to find out where you must be in a year, in six months, in a month. Then you have a goal to work toward and you are able to measure your progress. 

Need more ideas on how to progress? Go back and use brain-fooling tricks one and two. 

Positioning yourself for success takes planning. Block out some time now before the end of the year to get yourself ready to be even more successful in the rental property business next year—to win the race against the neighborhood, the government, and your tenants.

#propertymanagment #rentals #landlord #rentalproperty #renting #landlords #getitrented https://www.amazon.com/dp/B072JHCPM8

By Robert L. Cain, Copyright 2021 Cain Publications, Inc.

PROPERTY NEWS SERVICE

It’s a wonder anyone answers the phone anymore, but people do. Scammers stole $13.5 billion from those people last year reports the Federal Trade Commission.  That’s just actual scams that people fell for and doesn’t include the FCC-estimated $3 billion in time lost to time businesses wasted dealing the calls. To stem the scammer tide, the FCC has proposed yet another restriction on robocalls. More about that in a minute. 

TrueCaller Insights claims that in 2020 as many as 56 million Americans (22 percent) report they lost money as a result of a phone scam, up 30 percent from 2019’s 43 million people.  That’s only the reported scam losses.  Chances are, most people don’t report it, being too embarrassed to admit they got taken.

The Social Security scam, Robokiller reported, accounted for 14.2 percent of scam calls in 2020. You know, it’s the one where they say your Social Security Number has been canceled because of illegal activity on it, so you need to send them a gift card before the police show up and arrest you. That one was followed closely by the vehicle warranty scam at 12.9 percent.  Rounding out the top 10 are calls for reducing debt, computer and tech support, medical and prescriptions, vacation and timeshares, energy, solar, and utilities, lotteries, prizes and sweepstakes, money-making opportunities, home improvement and cleaning, and home security and alarms.

The FTC calls most scam calls “impostor calls,” where the caller “spoofs” a local number to try to get some poor sucker to answer the phone and fall for their fraud.  We’ve all gotten them. I got so tired of my phone ringing that I set my phone to ring through only if it’s someone in my contact list.  Anyone else can leave a message.  Funny how the scammers almost never bother to leave one. 

Spoofing is simple and cheap.  All you need is a PBX (private branch exchange), Voice Over IP (VoiP), a specially configured base station, and some software that does the spoofing. Now you’re ready to scam and threaten people with arrest or get them to shell out for an extended auto warranty.

Because it’s harder to prosecute bad guys in foreign countries, most calls originate outside the United States with most calls coming from five countries: Costa Rica, Guatemala, India, Mexico, and The Philippines.  Even so, when they do catch crooks, it’s fun to watch. A notable watch featured the arrest in India in October 2016 of people involved in the IRS scam. I remember the pictures of 750 workers perp walked to jail. Also arrested reported Forbes Oct. 6, 2016, were five people in Miami at about the same time for the same crime who were responsible for $2 million in fraudulent schemes that defrauded 1,500 victims.

Foreign call origination is easy and cheap, and done through “Gateway Providers.” Gateway Providers are those phone companies that offer cheap long-distance service around the world for 1 cent to 2 cents per minute. It goes both directions, and so calls originating in a foreign country into the US can get the deals.  Crooks set up calls with the Gateway Provider, run their VoiP through the calls, create the robocall script, spoof telephone numbers, and wait for the money to roll in from gift cards, cash cards, and credit cards.

The Federal Communication Commission wants to fix all that with the Fifth Further Notice of Proposed Rulemaking federal regulation they published on Sept. 9, 2021. The previous four hadn’t done much good; the calls not only didn’t slow down a bit but increased.  The new rule aims to eliminate foreign robocalls. They explain, “Eliminating illegal robocalls that originate abroad is one of the most vexing challenges the Commission faces because of the difficulty in reaching foreign-based robocallers and the foreign voice service providers that originate their traffic.  The proposals in the Further Notice would require the gateway providers that are the point of entry for foreign calls into the United States to take part in the fight against illegal robocalls originating abroad.”

At present, the FCC “requires all voice service providers to file certifications in the Robocall Mitigation Database regarding their efforts to fight illegal robocalls on their networks.” The FCC created the Robocall Mitigation Database to try to ensure that illegal robocalls don’t get through.  That’s worked, hasn’t it? Voice service telephone companies must certify that they have taken the appropriate measures to block illegal robocalls on their networks with call authentication and block any and all calls that come from telephone companies that haven’t certified the Robocall Mitigation Database. But Gateway Providers go unmentioned.

All companies must block any calls that meet one or more of four criteria:  “1) the subscriber to the number indicated that that number should never be used to originate calls; 2) the number is unallocated; 3) the number is unused; and/or 4) the number is invalid,” explains the FCC news release.  Calls are allowed or blocked using the STIR/SHAKEN caller ID authentication, a system that “uses an encrypted authentication  and verification process through the earliest carrier in the chain.” So, for example, if you make a call using your landline, the STIR/SHAKEN process would check to see if the number violates one of the four qualifications that would cause it to be blocked.

The new FCC proposal intends to stop those calls that originate outside the US by requiring Gateway Providers to use the Robocall Mitigation Database and STIR/SHAKEN to block calls.  But the new provisions won’t start right away. In their Fifth Further Notice of Proposed Rulemaking they say, “that the public interest will be best served by not enforcing the foreign provider prohibition during the pendency of this proceeding.” How that serves the public interest they don’t say.

How long before the foreign calls are regulated? The FCC, fuzzy on that, says only when they’ve finished discussing the regulations and appropriate parties have had an opportunity to add their comments. Expect robocalls to continue; expect scammers to double down on their criminal activities; expect to continue to have our time wasted dealing with the calls; and expect the FCC to promise to do their best to come up with more ways to block those calls. 

These new regulations are more nails in the robocall coffins, but these crooks are experts at pulling nails and finding new and more nefarious ways to cheat people.

Written for Zip Reports where they do employment and rental screening.

Contact Robert L. Cain at bob@cainpublications.com

By Robert L. Cain, Copyright 2021 Cain Publications, Inc.

PROPERTY NEWS SERVICE

American humorist Josh Billings observed, “Ignorance ain’t not knowin’ stuff; ignorance is knowin’ stuff that AIN’T TRUE.”   Landlords knowing too much that ain’t true easily fall victim to the bad tenant who knows less that ain’t true, and who is thinks in the words of the song by Blondie, “I’ll getcha getcha getcha getcha.”

That’s one reason we have rental agreements and leases.  Without everything in writing, both tenants and landlords come up with all kinds of things they know that ain’t true.  When it is spelled out in a lease, the lease language revokes the things someone thinks he or she knows.

Here are four things that landlords, tenants or both know that just ain’t true.

Ain’t True #1: A tenant can use the security deposit to pay the last month’s rent or for any unpaid rent.

The security deposit can be used for rent only if the landlord agrees to it. A security deposit is to pay for damages that the tenant may cause while moving in, living in or moving out of the property, not for rent.

Ain’t True #2: A tenant doesn’t have to pay rent if he or she gets a 30-day notice.

Tenants owe rent for the entire time they stay in or use a rental property. That may include rent for periods that only their belongings are in, or for when they have access to the unit. The fact that the landlord has asked a tenant to move in no way relieves the tenant of the obligation to pay rent.

Ain’t True # 3:The judge will give a tenant 30 to 90 days to move if he or she has children or a person with a disability in the household.

If a tenant loses an eviction case in court, the judge can order him or her to move out immediately. The law does not provide for extra time to people with disabilities or children.  The law does not single out families with children or the disabled for special treatment if they don’t pay rent, are bad neighbors, or damage the property.

Ain’t True #4: A landlord can’t charge more rent or a higher security deposit to one tenant than another.

The only reason a landlord may not charge one tenant more than others is for an unlawful discriminatory reason such as race, disability, or children. A landlord can charge more if it is for another, businesslike reason, such as pets, smoking, or bad credit.

Bad tenants make a living off knowing the law far better than an unread landlord.  They wait for us to make a mistake so they can “getcha getcha getcha getcha” and live free for two or three months.

It’s all in the lease, assuming the lease comes from an apartment, landlord or rental owners’ association, and not from the local office supply store or free off the internet.  Drag the lease out of the file, dust it off and read it.  It’s not what you know, it’s what you know that ain’t true that can result in a huge hit to your bank account.

by Robert L. Cain, Copyright 2021 Cain Publications, Inc.

PROPERTY NEWS SERVICE

A property manager I knew told the story about the time she was talking to a landlord about her rental property and said “the law says. . .”

The landlord replied aghast, “There are laws!!!?”

Yes, ma’am, there are laws.  And in most states those laws were written to protect the “poor, abused, downtrodden” bad tenant.  Also in most states there are too many judges who take it a step farther and interpret the laws and rule in ways that provide bad tenants even more rights to not pay the rent and trash property.

Shame on the legislatures and shame on the judges, but that is the situation we face when we own and manage rental property.

Rental property is one of the most regulated industries in the country.  It is filled with traps, pitfalls and snares awaiting the unwary landlord.  The rental property business is also one of the easiest to get into.  All you have to do is buy house, tidy it up a little, find a tenant, and rent it out.

Blissfully unaware of the landlord-tenant law of the state, landlords enter without proper notice, harass tenants when the rent is late, apply the apartment complex’s rules unfairly, select tenants in violation of the Fair Housing Act, and handle security deposits improperly.

Bad tenants often know the law. They know the law because they have had experience using it and have probably sued a landlord or two over the course of their bad-tenanthood pillaging and devastation.  Again and again they catch landlords unaware that laws govern our business.  They lurk behind moldy tall grass and under rocks waiting for their landlords to violate the law even a smidgen, and then they slither out to try to get a judge to let them live rent free for months and months.

The landlord-tenant laws of most states can be found online from your state’s secretary of state, or from your local apartment, landlord or rental owners association.  Having them on your bookshelf is one thing, but actually taking the time to read them and understand them is another.

Whenever I traveled to another state to speak, I always printed out that state’s landlord-tenant act and read it.  The first thing I look at are notice requirements, that is, how much time a landlord has to give to terminate a tenancy, change the terms of the rental agreement, allow after the rent is due before filing an eviction, and before he or she can enter a tenant’s home for inspection or repair.

Next I want to know the security deposit requirement.  Is there a limit on how much a landlord can collect? Does the deposit have to be placed in a special bank account? What are the requirements for accounting for it when a tenant moves out?

In most states’ landlord-tenant laws, you can expect to see similar rights and responsibilities for both landlords and tenants. The real differences lie in entrance, notification and security deposit requirements.  Those are the ones that get landlords in trouble if they violate them, and the ones that bad tenants can probably recite like scripture.

If you don’t know the law, you leave yourself like a sitting duck to the scheming of bad tenants.  These people will take your property, your money and your sanity.  Know the law, know the law, know the law.

By Robert L. Cain, Copyright 2021 Cain Publications, Inc.

PROPERTY NEWS SERVICE

Millions of Americans face financial difficulties because they just “don’t get it,” their financial health on a knife’s edge. On a basic five-question financial literacy quiz, 80 percent couldn’t answer four of the five questions correctly. The world runs on money, but they don’t “get” how money works. Because of their ignorance, their illiteracy, they sheepishly admit to losing an average of $1634 a year reports the Financial Educators Council.

These are 18 to 34 year olds, Millennials, who on the literacy quiz got wrong such questions as “Suppose you have $100 in a savings account earning 2 percent interest a year. After five years, how much would you have?”  They didn’t even ask them to do the math, just if it would be more or less than $102.  Or even a “super tough” one “Imagine that the interest rate on your savings account is 1 percent a year and inflation is 2 percent a year. After one year, would the money in the account buy more than it does today, exactly the same or less than today?”

“Financial literacy is the ability to understand and effectively use various financial skills, including personal financial management, budgeting, and investing. Financial literacy is the foundation of your relationship with money, and it is a lifelong journey of learning,” defines Investopedia.

Investopedia also warns, “The lack of financial literacy can lead to a number of pitfalls, such as accumulating unsustainable debt burdens, either through poor spending decisions or a lack of long-term preparation. This in turn can lead to poor credit, bankruptcy, housing foreclosure, or other negative consequences.”

Gflec.com reports the following facts. One in four Millennials, 24 percent, are financially fragile. Half could not come up with $2,000 if they encountered an unexpected financial issue. Thirty percent overdrew their checking accounts. They keep the payday loan companies and pawn shops in business since the half of them that have only a high school education use either or both sources of alternative financial services even including the 39 percent who have bank accounts and the 35 percent who have credit cards (presumably at their credit limits.)

Financial literacy helps answer such questions as how many credit cards someone should have, is borrowing for college worth it, should I buy or lease a car, should I rent or buy a place to live, and how much can I afford to pay for a mortgage or rent? Financial illiteracy can doom someone to poor or even disastrous economic decisions.  They simply don’t know how to figure out what makes most financial sense.

It continues its decline. All age groups find themselves worse off than 12 years ago, but Millennials saw the sharpest drop in financial knowledge. Just between 2009 and 2018, they saw an eight-percentage point drop in the literacy from 42 percent to 34 percent.  For the math averse and financially illiterate, that’s a 19 percent drop in literacy. But their parents’ generation, even though their literacy slipped, 51 percent could still answer four of the five questions correctly.

A National Financial Capability Study (NFCS), reports the TIAA Institute, shows that Millennials tend to rely heavily on debt, engage frequently in expensive short- and long-term money management, and display shockingly low levels of financial literacy while student loan burden and expensive financial decision making increased significantly from 2009 to 2018 among young adults.

These data bode poorly for the financial well-being of the country.  After all, in a few years, the Millennials will be in charge. Today, they are mostly our employees and renters.  They will be the bosses, the company owners, the teachers, the government workers, and filling every slot in the economy.  The older generations will be retired and depending on the Millennials to get it right. It doesn’t look promising.

This illiteracy pervades the entire country, border to border, coast to coast, north to Alaska, and across the ocean to Hawaii. WalletHub analyzed financial-education programs and consumer habits using 17 metrics that included high school financial literacy programs and the share of adults with rainy-day savings to learn the extent of illiteracy around the country. Even the most financially literate state, according to wallethub.com, Virginia, comes in at only 68.25 percent financially literate slightly over two-thirds. 

The most financially illiterate state, Alaska came in at 53.39 percent financially literate, followed closely by Mississippi (54.2), South Dakota (54.76), Oklahoma (55.57), Louisiana and Arkansas (54.15), New Mexico (54.57), West Virginia (56.4), and District of Columbia (56.54 percent).  The District of Columbia figure brings up several obvious questions. All the people in states bumping on the bottom of financial literacy are ripe for scammers. The financially illiterate simply can’t see through the scammers’ flimflam.

As we might expect, their amount of education correlated with the financial literacy. Those with only some high school show a financial literacy rate below 50 percent while those with graduate degrees come in at about 80 percent.

On a knife’s edge, one step ahead of financial disaster, their economic wellbeing can all blow up at any time with late or unpaid rent, auto repossession, collections, and bankruptcy. It affects not just them but all those around them and with whom they do business including employers and landlords.

Written for Zip Reports where they do employment and rental screening.

Contact Robert L. Cain at bob@cainpublications.com

By Robert L. Cain, Copyright 2021 Cain Publications, Inc.

PROPERTY NEWS SERVICE

Q:  I have a new tenant that asked if they could put a California closets style closet system in the master walk in.

Can you give me advice on a tenant doing changes to the property on their own dime? I’m okay with the closet system as long as they do not then remove it when they leave (holes in the wall, damages, etc.)

Thanks, Steve, Dayton, Ohio

The short answer is any improvements done to the property by a tenant stay with the property.  That means that if the tenant installs a California closet system, it becomes a fixture and part of the property as Steve has indicated he is are aware of.

There is a longer answer, though.  A number of years ago, I was friends with Jack, an apartment manager, who managed a small apartment building that attracted high-end, long-term tenants. An older building, built in the early 1900s, complete with hardwood floors, concrete walls between units and huge rooms, it was in a desirable part of town that attracted yuppie-type residents.

Jack marveled that when many tenants moved in they wanted to carpet their apartment with top-of-the-line, wall-to-wall carpeting, texture walls and even hired professional decorators to trick out their new digs.  He couldn’t imagine spending that kind of money as a renter. But he welcomed anyone who wanted to make improvements such as those. What that meant to him was that these tenants were planning on being there long-term—none of this moving after a year or so. 

The California Closets case is similar. I checked some websites that sold California Closet systems and found a couple that would allow you to “build your own” and calculate the cost.  Even a small closet organizer is going to cost around $500—a lot of money to spend for a fixture in a rental house.

So the longer answer is that we probably should welcome tenant improvements such as those.

The fly in the ointment is when tenants move out and think that the fixtures they installed belong to them.  If a tenant installs a fixture, we need to be sure he or she understands the ramifications of installing that fixture.

We can handle it a couple of ways.

One is, as this landlord suggests, that the closet system remains in the property and that they assure you that no damage will result from their installing the system.  Creating an addendum to their rental agreement that explains that any item installed as a fixture remains with the property is an excellent step.  On that addendum be sure to provide examples of what would be considered a fixture. The tenant needs to sign the addendum and receive a copy.

The other way to handle it would be to tell them that they can install the closet system and take it with them when they leave, but that there must be no nail or screw holes left in the property that could be attributed to the closet system and that the existing closet must be restored to its original condition.  Take pictures of the closet as it was at move-in so there can be no question.  With items such as wall-to-wall carpet it is less likely that tenants will expect to take it with him, but you never know.

Regardless, this procedure would apply to all kinds of improvements tenants want to make on a property, whether it’s wall-to-wall carpeting, garage cabinets, or custom lighting.

In either case, what we also must be concerned with is that the installation of any fixture to the property could be either sloppy and damage the property, or could create a safety issue.  Always supervise and/or inspect any such installation to ensure it is done both properly and safely.  Remember, as property owners we are responsible for any work done on our property, regardless of who does the work. And we need to diligently protect our investments.

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