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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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.
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!”
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.
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?