{"id":44342,"date":"2019-11-13T12:00:34","date_gmt":"2019-11-13T19:00:34","guid":{"rendered":"https:\/\/www.biggerpockets.com\/renewsblog\/?p=44342"},"modified":"2024-01-27T12:02:43","modified_gmt":"2024-01-27T19:02:43","slug":"2013-06-07-lie-not-the-owner","status":"publish","type":"post","link":"https:\/\/www.biggerpockets.com\/blog\/2013-06-07-lie-not-the-owner","title":{"rendered":"Is It a Lie to Tell the Tenant I&#8217;m Not the Owner?"},"content":{"rendered":"\n\n      <iframe loading=\"lazy\" frameborder=\"0\" height=\"200\" scrolling=\"no\" src=\"https:\/\/playlist.megaphone.fm?e=BIGPOC3832826459&#038;light=false\" width=\"100%\"><\/iframe>  \n\n\n\n<p>I want to stir up come controversy\u2014and get your opinion on this matter.<\/p>\n<p>You see, I&#8217;ve stated numerous times on both the BiggerPockets <a href=\"https:\/\/www.biggerpockets.com\/blog\/\" target=\"_blank\" rel=\"noopener noreferrer\">Blog<\/a> and in the <a href=\"https:\/\/www.biggerpockets.com\/forums\" target=\"_blank\" rel=\"noopener noreferrer\">Forums<\/a> that my favorite tip for being a good landlord is not admitting I&#8217;m the owner\u2014instead just being &#8220;the property manager.&#8221; In fact, on my list of the best advice for easy <a href=\"https:\/\/www.biggerpockets.com\/blog\/2016\/07\/30\/how-to-be-a-landlord\/\" target=\"_blank\" rel=\"noopener noreferrer\">landlording<\/a>, that&#8217;s my number one piece of advice. I&#8217;ve even mentioned it in the <a href=\"https:\/\/www.biggerpockets.com\/podcast\" target=\"_blank\" rel=\"noopener noreferrer\">podcasts<\/a> a few times.<\/p>\n<p>I didn&#8217;t invent this idea. I believe I first heard about it from Mike Butler in his awesome landlording book <a href=\"https:\/\/amzn.to\/372I5Ax\" target=\"_blank\" rel=\"noopener noreferrer\"><em>Landlording on AutoPilot<\/em><\/a> (which if you are a landlord and have not yet read, go to Amazon right now and get a copy. You&#8217;ll thank me and Mike later.)<\/p>\n<p>Ever since talking about this on the site, I&#8217;ve had several people ask me if this wasn&#8217;t a little too deceptive, especially since anyone can look it up in the county records and find out who owns a property. What if I got caught? Isn&#8217;t it morally wrong to do this?<\/p>\n<p><em><strong>Related: <\/strong><a href=\"\/renewsblog\/2013\/06\/18\/should-you-tell-the-tenants-that-you-are-the-owner-counterpoint\/\" target=\"_blank\" rel=\"noopener noreferrer\">Should You Tell the Tenants That You Are the Owner? [Counterpoint]<\/a><\/em><\/p>\n<p>So, I wanted to look a little deeper at the issue and get your opinion. I invite you to read through my reasoning below\u2014and then leave me a comment at the end and let me know if you agree or disagree.<\/p>\n<p>Also, be sure to check out the other side of the debate by reading Kevin Perk&#8217;s great counterpoint article &#8220;<a href=\"\/renewsblog\/2013\/03\/11\/tell-tenants-own\/\" target=\"_blank\" rel=\"noopener noreferrer\">Do You Own the Place? Why You SHOULD Tell Your Tenants About Your Ownership<\/a>.&#8221;<\/p>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"alignnone size-full wp-image-96076\" src=\"https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2013\/09\/landlord-lessons.jpg\" alt=\"\" width=\"702\" height=\"336\" title=\"\" srcset=\"https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2013\/09\/landlord-lessons.jpg 702w, https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2013\/09\/landlord-lessons-300x144.jpg 300w\" sizes=\"auto, (max-width: 702px) 100vw, 702px\" \/><\/p>\n<h2>&#8220;I&#8217;m Not the Owner&#8230;&#8221;<\/h2>\n<p>For those not familiar with this way of operating, I&#8217;ve stated previously,<\/p>\n<blockquote>\n<p>&#8220;Finally, my number one tip for being a successful landlord: don\u2019t be the owner. This is especially true for those of you who, like me, are peacemakers and non-confrontational. As a landlord\u2014you are going to face a lot of tough decisions and awkward conversations. When you are the owner\u2014the blame is on you and as a result you will often make decisions based on convenience rather than common sense. (After all\u2014you better not be the owner. The owner should be a business entity that you set up with your attorney.)<\/p>\n<p>Instead, from this moment on, you are no longer the owner. You are simply the property manager.<\/p>\n<p><em>Tenant: &#8220;I can\u2019t move my 200-pound dog into this studio apartment!?&#8221; <\/em><\/p>\n<p><em>Me: &#8220;No, I\u2019m sorry\u2014the owner doesn\u2019t allow dogs here.&#8221;<\/em><\/p>\n<p>Additionally, you can tell the <a href=\"\/renewsblog\/2013\/08\/17\/rental-properties-llc\/\" target=\"_blank\" rel=\"noopener noreferrer\">tenant<\/a>, &#8220;I need to talk to the owner about this,&#8221; to buy yourself time to think about odd requests. Instead of the tenant being upset with you\u2014they are now upset with the mysterious \u201cowner.\u201d Feel free to play this up all you want:<\/p>\n<p><em>Me: \u201cSorry, I tried talking the owner into it but he is a stickler for the rules.\u201d<\/em><\/p>\n<p><em>Tenant: \u201cUgh, I hate that guy.\u201d<\/em><\/p>\n<p><em>Me: \u201cYeah, me too\u2026\u201d<\/em><\/p>\n<\/blockquote>\n<p>It&#8217;s much easier to make decisions when I am just a third party in the relationship, rather than the &#8220;big bad owner.&#8221; I&#8217;ve found this works really well with my personality and helped me to avoid a lot of nasty conversations that I&#8217;d rather not engage in.<\/p>\n<p><strong><em>Related: <\/em><\/strong><em><a href=\"\/renewsblog\/2013\/08\/17\/rental-properties-llc\/\" target=\"_blank\" rel=\"noopener noreferrer\">Low-Stress Landlording\u2014Yes, It\u2019s Possible!<\/a><\/em><\/p>\n<p><img loading=\"lazy\" decoding=\"async\" class=\"alignnone size-full wp-image-108817\" src=\"https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2019\/03\/talking-on-cell-phone.jpg\" alt=\"woman in maroon shirt and yellow sweater talking on a cell phone while going over notes on a notepad\" width=\"702\" height=\"336\" title=\"\" srcset=\"https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2019\/03\/talking-on-cell-phone.jpg 702w, https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2019\/03\/talking-on-cell-phone-300x144.jpg 300w\" sizes=\"auto, (max-width: 702px) 100vw, 702px\" \/><\/p>\n<h2>Is This Lying?<\/h2>\n<p>As a deeply moral guy, I don&#8217;t believe lying is ever okay. Not in business, not in life, not ever. So, before I decided to switch to this strategy, I really had to ask myself: &#8220;Is this lying?&#8221;<\/p>\n<p>In the end, I&#8217;ve decided it wasn&#8217;t\u2014and here is why.<\/p>\n<p>I hold my real estate properties with LLCs, not personally. In other words\u2014<strong>I don&#8217;t own the properties.<\/strong> I have a management role in an LLC, which owns the property.<\/p>\n<p>Yes, the distinction is subtle. But in my opinion, it&#8217;s separate enough to not bother my conscience.<\/p>\n<p>Not stating the whole truth? Yes. Lying? I don&#8217;t believe so.<\/p>\n<p>Some people might believe I&#8217;m being too deceptive here, and I understand the concern. I mean, I very clearly am making a point to not let the tenant know I own the property. However, in my opinion, I don&#8217;t believe it&#8217;s any of my tenants&#8217; business to know what business I own. I don&#8217;t let them know about the companies I have stock in, the political party I donate to, or the church I tithe to. Why should I tell them I own a company that has real estate holdings?<\/p>\n<p>If a tenant directly asked me, &#8220;Do you have any ownership interest in this property?&#8221; or &#8220;Are you involved with the LLC that owns the company?&#8221;, I would not lie. I&#8217;d tell them yes. However, I&#8217;m not asked this\u2014ever\u2014and don&#8217;t believe I ever will be.<\/p>\n<p>Furthermore, I feel even more justified in my decision because I know that in every sense, I am separate from my business. I know if I wanted to go pick up the rent from one of those LLCs and just stick the money in my pocket and buy a new TV, I would be breaking the law (or at least the tax code). That money does not directly belong to me; it belongs to the company, which then pays me.<\/p>\n<p>If someone were to sue my company for wrongdoing, they aren&#8217;t going to sue me personally (hopefully), because the company is a separate entity that I paid good money to a lawyer to create.<\/p>\n<h2>Conclusion<\/h2>\n<p>So, I want to know your opinion. Is it wrong? Is it lying?<\/p>\n<p>I&#8217;m totally opening up this conversation for debate, because I want to know what others think. In the end, I think a lot of it comes down to my personal conscience\u2014and as of this point in time, I don&#8217;t feel wrong doing it.<\/p>\n<p>Would you?<\/p>\n<p><a href=\"https:\/\/www.biggerpockets.com\/store\/managing-rental-properties-ultimate\" target=\"_blank\"><img loading=\"lazy\" decoding=\"async\" class=\"alignnone size-full wp-image-118745\" src=\"https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2019\/11\/blog-banner-Managing.jpg\" alt=\"\" width=\"700\" height=\"120\" title=\"\" srcset=\"https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2019\/11\/blog-banner-Managing.jpg 700w, https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2019\/11\/blog-banner-Managing-300x51.jpg 300w\" sizes=\"auto, (max-width: 700px) 100vw, 700px\" \/><\/a><\/p>\n<p><em>What do you tell your tenants? Why?<\/em><\/p>\n<p><strong>Leave your feedback in the comment section below.<\/strong><\/p>","protected":false},"excerpt":{"rendered":"<p>Is it a LIE to tell your tenants that you don&#8217;t own the property? Here&#8217;s why some owners (including me) choose to represent themselves as just the &#8220;property manager.&#8221; <\/p>\n","protected":false},"author":710,"featured_media":119144,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[7119,5183],"tags":[],"class_list":["post-44342","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-biggerpockets-daily","category-landlording"],"acf":[],"comment_count":0,"_links":{"self":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/posts\/44342","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/users\/710"}],"replies":[{"embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/comments?post=44342"}],"version-history":[{"count":0,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/posts\/44342\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/media\/119144"}],"wp:attachment":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/media?parent=44342"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/categories?post=44342"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/tags?post=44342"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}