What I’ve Learned About Landlord Anonymity Over 15 Years in the Rental Industry

by | BiggerPockets.com

Can landlords be truly anonymous in the 21st Century?

Of course not. But that doesn’t mean it has to be easy to figure out who a property’s owner is or where to find them.

I have the pleasure of joining an asset protection attorney next week for a live panel on landlord privacy and asset protection, which has me thinking a lot about landlord anonymity. So I thought I’d share with you what I’ve learned over 15 years in the rental industry, as both a landlord and renter. (I remain a renter to this day, although I did have a pleasant three-year stint as a homeowner once.)

“Why do landlords need privacy? Why does anyone need privacy if they have nothing to hide?”

There’s always a goodie-two-shoes who thinks privacy is some kind of sin reserved for criminals. That everyone’s laundry should just be on display all the time to the entire world. I’ll tell you why landlords need privacy: because I’ve had tenants show up at my fricking house at 8:30 at night while I was finishing dinner and wooing a beautiful woman.

(Who’s now my wife, so all you goodie-two-shoes can lay off the judging already!)

Landlords are small business owners. We deserve to draw our own boundaries and not have customers calling at all hours of the day or showing up at our homes.

In other words, we’re entitled to however much privacy we feel is appropriate. Here are some measures landlords can take, when they—we—want to draw boundaries between ourselves and the entitled, self-righteous, litigious world out there.

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P.O. Boxes

Don’t want your tenants (or anyone else, for that matter) showing up at your door in the middle of your date night or dinner party?

Use a P.O. box for all official landlord mail.

P.O. boxes are cheap; you can rent one for as little as $5/month. Nowadays, you can use a street address, rather than an obvious P.O. box address, even with official USPS P.O. boxes.

Related: 3 Steps to Use an Anonymous Trust to Hide Company Ownership

You can also authorize the post office or the private mail service to sign for your certified mail and packages.

The best part? You don’t have to be local. There are private mail services that let you view your unopened mail online, and then select Shred, Forward, or Open & Scan to view the mail online. (I use St. Brendan’s Isle, if you’re looking for a recommendation. Tell them I sent you, maybe they’ll give me a free month or something. Well, OK, they probably won’t. But it’s nice to feel appreciated.)

Anonymous Phone Forwarding

By now everyone’s familiar with Google Voice and other anonymous phone numbers. Many are free.

You don’t want tenants knowing your home phone number, or even your mobile number, if you want any hope of anonymity.

These phone forwarding services also let you quickly and easily switch forwarding off an on with a click of a button. So, if you’re going to bed and want to leave your phone on in case your teenage daughter has an emergency, but you don’t want tenants calling you at midnight, you can switch off access from the latter while remaining available to the former.

Social Media

People are such exhibitionists these days on their social media accounts. “Look what I had for breakfast! Look at my latest outfit that I went into credit card debt to buy! Look at the face my infant made when she farted!”

It’s tedious.

Alright, alright, this isn’t supposed to be a rant—or at least not just a rant.

Anyone who cares about privacy and who also wants to have social media accounts, has a very simple option available: Change your privacy settings so that only your friends can see your posts.

“But Brian, then not everyone will be able to see photos of my adorable six-month-old daughter farting!”

To which I can only respond: Do you think anyone other than your friends want to?

Seriously, though, you don’t want your tenants friending you on social media. If you absolutely must interact with your tenants on social media, do so as your official business page and manage it from a separate personal account with a nickname or pseudonym.

Separate Bank Accounts

I’m not going to spend much time here, but landlords should have separate bank accounts so that they don’t commingle their personal funds and their rental business funds.

Because yes, your rentals are a business. Even if you’re a sole proprietor, you need to treat your rental investing business as (you guessed it!) a business.

It keeps your accounting cleaner. It keeps your taxes cleaner. And if you choose to own your rentals under a legal entity (more on that shortly), you’ll need separate accounts if you want any protection whatsoever.

The “I’m the Manager” Trick

One of the (dozens of) tricks we teach in our property management course is to never, ever introduce yourself as the “owner” or “landlord.” You’re the “manager.” End of story.

Otherwise, you give up all your privacy and anonymity in your first breath of introduction.

Related: Can Investors & Landlords Own Real Estate Anonymously (Or is Privacy Dead)?

But beyond simply maintaining anonymity as the owner, when you’re just the manager, you give yourself an extra layer of distance from all decisions (at least in the eyes of the tenants). You can say things like “Ok, I understand your request. I’ll pass it along to the owner and will get back to you.”

Or here’s another one: “I’m sorry, but the owner’s policy is that she doesn’t allow deadbeat boyfriends to move in without passing the tenant screening like every other resident.”

Hiring a Property Manager

Similarly, when you a hire a property manager, you put one more degree of separation between you and the renters.

They know the property manager’s name and number and mailing address. They don’t know yours.

And they certainly won’t show up at your house at 8:30 at night.

Pretty simple point, which doesn’t need any more elaborating.

Legal Entities

What’s not a simple point? Whether landlords should use legal entities.

(This is why the panel includes an asset protection attorney! This stuff gets complicated fast, and I don’t have a law degree.)

But here’s what I do know: When it comes to asset protection, landlords should either go big or go home.

I’m serious—half measures won’t help you. They’ll just cost you money and headaches. I know. I’ve spent my landlording career using half measures for asset protection, and looking back, all I’ve done is waste a lot of time and money.

You may decide that you’re less concerned about the risk of lawsuits than you are about avoiding the headaches and costs of setting up proper asset protection. And that’s fine—in fact, I applaud you for being decisive and making a firm judgment call.

If you do want to own your properties with more anonymity and with protection against lawsuits, speak with an asset protection attorney. I’m happy to connect you with my friend who I’m appearing with, if you want a referral.

Here’s the thing: When you own your properties in your own name, all of the other measures in this article lose much of their potency. Anyone can go online and look up your property in public records, and there’s your name and mailing address, naked and exposed for all the world to see.

If you choose to own your property under legal entities, you give your anonymity a fighting chance. Yes, a name will still be on record for who filed the paperwork, and you’ll still need a resident agent. But a good asset protection attorney will structure your assets so that your legal entities are held in a trust, adding layer upon layer of protection.

Is Asset Protection Bulletproof?

No. Of course not. A determined litigator will still find you, if they really want you.

But by making it difficult to determine who you are, much less what your assets are, much less how they can be collected against, you raise the barrier of entry to sue you.

In other words, you can deter lawsuits before they happen. Those slimy personal injury lawyers, encouraging tenants to file “slip ‘n fall” cases? They look for easy wins. But the more privacy, anonymity, and legal barriers you’ve put in place, the harder the target you make as a landlord.

Maintain as much privacy and anonymity as you can. Not everyone needs to know every detail about you. As a landlord who’s been sued and who’s had tenants call me at all hours of the night and show up at my front door, trust me: The less the world knows about your landlord business, the better.

Whew! Divisive, much? I’m sure there are those of you who agree that privacy has value, and others who think anyone who believes in privacy is some kind of nutcase who lives in a walled compound in Montana with “I shoot first and ask later” signs all around it.

But I am curious about your thoughts on landlord privacy, despite the extra dose of personality in this one. What do you do to preserve your privacy and protect your assets?

About Author

Brian Davis

Brian is a landlord and long-time rental industry expert, who offers a range of free landlord resources through his company, SparkRental. Grab a state-specific lease agreement or take our free mini-course on buying 2-4 unit rental properties while you’re at it.

Message me if you’d like me to write for you about real estate or personal finance!

37 Comments

  1. Erik Whiting

    I agree with and follow all of the procedures you’ve outlines. We own everything in an LLC, have separate business accounts, we’re the manager not the owner, etc. Not because that’s a foolproof way to shield us, but as you say, it “deters.” LLCs are very cheap and easy to set up and maintain in my states ($80, one time fee…done forever), so why not? Bank accounts are free. Business cards with the word “Manager” under my name are no more expensive than if they said “Owner.”

    I also carry a beefy liability policy, just in case the stuff hits the fan and all barriers are broken down.

    • Brian Davis

      Liability insurance definitely helps. I’ve had enough negative experiences with insurance companies to know that they love to promise big up front, but aren’t so quick to pay out when it comes time for a claim. And with liability, it seems like they exclude the things you’re most likely to be sued for. But it’s another layer of protection, which doesn’t hurt.

  2. Christopher Smith

    I’ve been a landlord since 99, and a serious one since 08. I’ve never met, nor have I been contacted by a single tenant in that entire time even though I live right across the street from one of my tenants and the properties are all in my name.

    Another great advantage to having top flight property management on hand at all times.

  3. JL Hut

    Every since a tenant issued a threat against my family 25 years ago, I have used a P.O. Box address, All of my recorded deeds and records use it so no one can find me by using public records.

    I have been the “Manager” for 25 of the last 37 years of landlording. It has many, many advantages.
    You can always defer to the owner when the tough questions come from the tenant. “I will have to ask the owner about that and get back to you” When the owner, (me) tells me to say no to the tenant request, then the tenant will be mad at the owner and not me. Also, this way I have an excuse for talking to myself when my wife finds me in the yard alone mumbling. When she asks me why I am taking to myself, I just tell her I am conducting business.

    • Brian Davis

      I’m so sorry to hear your family was threatened by a tenant JL, I can only imagine how disturbing that must have been. But it sounds like you’ve responded by taking anonymity extremely seriously, and that it’s been a huge help for your landlording business ever since.
      And I love the “talking to yourself about business,” I do the same!

  4. JL Hut

    Downside of LLC, if you have owned a rental for decades and convert to a LLC, some states your rental will be reassessed at current market value for property taxes. Like paying more taxes? Think and check you local laws before you LLC. In life things are seldom Black or White, consider both sides of the coin.

        • JL Hut

          As everything with the IRS, it’s never simple. It depends on the elections you make with the IRS when you file. If you’re a single member LLC, it may be that you will be considered a disregarded entity and not have to file a separate return or you may have to file a separate return, see above. Complicated. If you have more that one member you most likely will have to file a separate return. Married? it depends on if you are in a community property state or not. Consult 5 or 6 CPA’s and average the answers. Good luck.

        • Denis C. Monahan on

          While a LLC can elect to be treated as an association taxable as a corporation by filing Form 8832, Entity Classification Election, and, once it has elected to be taxed as a corporation, a LLC can file a Form 2553, Election by a Small Business Corporation, to elect tax treatment as an S corporation, the vast majority of private real estate investor LLCs do not make those elections. Single member LLCs don’t have to file separate tax returns. Multi-member LLCs have to file partnership returns and members get K-1s.

  5. Denis C. Monahan on

    “But a good asset protection attorney will structure your assets so that your legal entities are held in a trust, adding layer upon layer of protection”.

    Having your legal entities held in the typical revocable estate planning trust is a good idea because it can avoid probating assets upon your death and other benefits, but it does not add a layer of protection.

  6. Neil Schlimgen

    Brian,

    A few questions on your opinion about privacy and “house hacking”. If a new investor owns an owner occupied property, in his own name, does he or she have to tell tenants they are the owner? Do they have to make the checks out to the sole proprietor or can the owner set up a business bank account without having an LLC set up yet for the first few properties? Or would one recommend just setting up the business entity from the get go?

    Thanks for the great articles!

    • Brian Davis

      Hi Neil, I think you’d have trouble opening a business bank account without a business formed. House hacking is a little trickier for anonymity, and you may decide to go in the opposite extreme and just build a close personal relationship with your tenant since they’re also your neighbor. But if you do want anonymity, and to claim you’re just managing the property, you should probably own the property under a business name.

    • Linda Hastings

      Even if you are operating as a sole proprietorship, you should be able to file an Assumed Name Certificate or a DBA (doing business as) with the county that lets you conduct business under a name other than your own. The filed DBA should be sufficient to let you open up a separate business checking account. Tenants then make checks payable to your business name. True, if the tenant wanted to, they could look up your business in the county records and see your name on the DBA, but most won’t bother going to this much trouble.

  7. Jerry W.

    Keep in mind that if you manage your units yourself you will not get the maximum protection a corporate entity provides. A corporation does not protect you from doing a bad thing or failing to do something you should have. It can protect you from many run of the mill claims, and can limit the assets that a lawsuit can go after if you maintain them correctly. If you have property managers who are a separate business from yours, you already have limited your liability a lot.
    I have had rental property for nearly 30 years and have never told anyone I was a manager. My personal cell phone number is on all of my leases and I have never had a tenant abuse having my number. in fact I now stress that if water is actively running anywhere but down the drain and they cannot correct it or get a hold of my handyman to call me. On the other hand I live in a small town and probably do have the same problems many landlords face in larger cities. While reasonable asset protection is a very good idea, some of the stuff I see being sold lately is so over stated and overdone it is ridiculous. Like buying $50 million of liability protection, it can over done. Keep in mind that your portfolio has to be able to cover the overhead of the costs and the time involved in creating dozens of entities.

    • Christopher Smith

      Agree that liability protection while important is being way over promoted especially by those promoting LLC formation. I think the comment of “adding layer upon layer of protection” is symptomatic of this trend.

      In the end adding layer upon layer of additional protection may be achieving little more than adding layer upon layer of additional unintended consequences not to mention the additional costs and constraints.

    • Brian Davis

      Very true that asset protection needs to be proportionate to your assets – if you have one $50,000 property and little else in the way of assets, you need a lot less protection than someone with 20 rental properties and other significant assets.
      And I’m glad to hear you’ve had such a positive experience with your renters Jerry! I do think that the culture of your city and your renters makes a big difference. In many towns, people see landlords as a service provider. In others (like where my rentals are), there’s a more antagonistic attitude towards “greedy” landlords “evicting poor people from their homes” and so on.

      • Kevin Nesbitt

        Thanks for the informative info Brian. I tried to put my properties in an LLC, but was warned against it by the banks that I have a mortgage with and my lawyer. I was told that because the mortgages were in my name I was not allowed to transfer to an LLC because I would run the risk of the bank “calling the loan”. As I pay off each property I will eventually form an LLC. For now, I pay extra for insurance to cover me against any “slip and fall” litigations. What do you think of my situation, Brian?

    • Denis C. Monahan on

      I am a Michigan real estate attorney that represents a number of private real estate investors and I set up LLCs and advise investors on asset protection. It is my advice that you work with an attorney who is licensed to practice in your own state as many laws relating to these issues are state laws. When you read things, keep in mind that what what applies in one state may not apply in other states and some attorneys go overboard in claiming that their state (or Nevada or ????) is the best state to set your LLC up in. Many states require a LLC formed in another state to register to do business in the state where you have rental properties and filing in the other state just doubles your paperwork and expenses. There are a number of other real estate issue that vary from state to state.

  8. Mike Glover

    Great read. Asset protection is huge and too many people fall for the idea of not needing it. They do! In any business, asset protection with a trust is a must. I would love to hear more about the mail service mentioned, but I guess I’ll have to research that more for my market areas. Thanks for the read!

  9. Terrell Garren

    I use an LLC and umbrella insurance policy for asset protection for 16 SFRs. I like the idea of a PO box to provide some anonymity regarding where I live. I am very upfront about me being the property owner. When I explain my expectations to tenants and tell them I will take care of them if they take care of me, my experience is that tenants are more respectful of their obligations.

    • JL Hut

      In Michigan I found it very difficult to find an umbrella policy for over 10 single-family units. Eventually did find one company that would write an umbrella for more than 10, but I was sad to learn that their umbrella was just an extension with a higher limits of the specific liabilities coverage of my primary policy. Umbrella policy used to not only provide higher limits, but filled gaps in the primary policy coverage. I concluded that if an umbrella policy only provides higher limits I might as well just raise the limits on my primary policy.

    • Kevin Nesbitt

      Do your 16 SFR have a mortgage on them? I was advised not to transfer my properties into an LLC while I owed a note on them. I was told that transferring into an LLC could cause the banks to “call the loan” and demand immediate payment.

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