RENT Magazine discusses the latest investing, legal, screening, and tech trends in the rental industry. Contributors include attorneys, tax experts, investors, and real estate influencers. Stay in the know and read RENT Magazine for FREE.
WINTER 2025
Bethany LaFlam
Cameron Lewis
California Property Law Group
Courtney Vitek
Dan Lewkowicz
Eric Chen
Christian Walsh
Best of 2024 Awards
Ratner Maintanence
Jason Malabute
Joel Jones
Patrick Marin
Mitch Speigle
Rebekah Taylor
Taylor Avakian
Tara Samuels
Tracey Merrell
Tony Stancato
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THE OFFICIAL PUBLICATION OF THE AMERICAN APARTMENT OWNERS ASSOCIATION
AAOA.COM
TEAM VP Robbie Cronrod Editor in Chief
Alexandra Alvarado Contributing Editors Allen Artcliff-Cronrod Nancy Abrams Contributors Altom M. Maglio Bethany LaFlam Bradley Barth, Esq. CA Property Law Group Cameron Lewis Christian Walsh Courtney Vitek Dan Lewkowicz Eric Chen Grant Drzyzga Jacob Wilson Jason Malabute Joel Jones Lauren Lieb Leah Maher Leslie Tucker, Esq. Mitch Speigle Nancy Abrams Omid Ghanandiof Patrick Marin-Finn Ratner Property Maintenance Rebecca Peterson Rebekah Taylor Richard D. Gann, JD
CONTENTS
05
HOW TO CREATE THE PERFECT TENANT CRITERIA (WITHOUT VIOLATING FAIR HOUSING LAWS)
10 15
IS IT TIME TO UPGRADE YOUR PROPERTY MANAGEMENT SOFTWARE?
LANDLORDS LEFT BEHIND: FIGHTING TO RECOVER LOST RENT FROM THE COVID EVICTION MORATORIUM
Tara Samuels Taylor Avakian Tony Stancato Tracey Merrell
20
SOLVING 2025’S TOP RENTAL CHALLENGES THROUGH DIGITAL TRANSFORMATION
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Welcome to RENT! It’s an understatement to say that the beginning of 2025 has been a little rough. We at AAOA want to express our concern and best wishes for a speedy recovery to everyone in any way impacted by the Los Angeles wildfires or other recent catastrophes around the country. In this issue, we announce the AAOA Awards for distinction in the multifamily industry. The Best of 2024 Awards recognize individuals who have achieved excellence through such fields as writing, podcasting, education, property management and more. We have curated a number of articles about legal issues and technology to help you manage your multifamily business. On the legal side, we present a piece about recovering lost rent from the COVID eviction moratorium, a case study about the high cost of neglecting asset protection, and how to legally handle Section 8 vouchers. We also discuss how to set applicant criteria to avoid Fair Housing Act lawsuits. You’ll not want to miss how to utilize technology to solve this year’s top rental challenges, including how remote landlords can fill vacancies, upgrading your property management software, and how to track expenses online. On the light side, enjoy Celebrities on the Move and learn why Robert Redford, Gwyneth Paltrow and Mike Tyson are buying or selling their homes. Happy reading!
26 30 37 34 42 53 57
IS IT TIME TO LET GO OF YOUR RENTAL?
4 ESSENTIAL TOOLS EVERY REMOTE LANDLORD NEEDS TO FILL VACANCIES
TAKING A LOOK AT CALIFORNIA’S INSURANCE PROBLEMS
SOURCE OF INCOME PROTECTION: CAN YOU DENY A SECTION 8 APPLICANT?
AAOA’S BEST OF 2024
FOCUS ON THE REAL WORK, NOT PAPERWORK
ARE YOUR CALIFORNIA PROPERTIES COMPLIANT WITH LAW AND CODE ENFORCEMENT? CASE STUDY: THE HIGH COST OF NEGLECTING ASSET PROTECTION FOR RENTAL PROPERTY OWNERS
62
66 74 69
CELEBRITIES ON THE MOVE
THE ROLE OF PUBLIC RECORDS IN BACKGROUND SCREENING
NEXT GENERATION STREAMING FOR MULTIFAMILY RESIDENCES: A SATELLITE-FREE ENTERTAINMENT SOLUTION
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HOW TO CREATE THE PERFECT TENANT CRITERIA (WITHOUT VIOLATING FAIR HOUSING LAWS)
As a landlord, it is your legal obligation to apply the same requirements to everyone who applies for a rental in your properties. If you do not, you have violated the Fair Housing Act and opened yourself up to a possible lawsuit.
HOW TO AVOID A DISCRIMINATION CHARGE The first step in avoiding a Fair Housing Act discrimination claim against you is to establish a specific rental criteria for prospective tenants. You should be prepared to give each applicant a written document outlining exactly what your conditions are. These criteria should also appear in your advertising to proactively weed out bad prospects. While you want to eliminate applicants that do not meet your criteria, being overly restrictive can cause you to overlook appropriate candidates or block you from filling vacancies. Some criteria that could be too rigid are a too-high credit score requirement, a blanket criminal record ban, or a stringent rent-to-income ratio range. For instance, it might be better to set an acceptable credit score range rather than a minimum credit score. It is historically true that older applicants are more likely to have higher credit scores than much younger applicants. More mature people have had more time to build a positive credit history while younger applicants are just beginning to establish their credit profile. This is one reason that you should not judge a person merely by their score. You need to consider their payment history, and the other invaluable factors included in AAOA’s credit and background checks so as not to miss out on a good tenant.
The Fair Housing Act (FHA) shields people from discrimination when they are renting or buying a home, getting a mortgage, seeking housing assistance or engaging in other housing- related activities. This protection is administered by the U.S. Department of Housing and Urban Development (HUD) and covers most dwellings, including private, public and federally funded housing. If an applicant believes that they were unfairly discriminated against when they were looking for a rental home, they can easily file a complaint with HUD. What is the Fair Housing Act?
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THE SCORE YOU WILL ACCEPT SHOULD BE BASED ON THE LOCATION AND KIND OF PROPERTY YOU OWN.
WHAT SHOULD YOUR CRITERIA BE? When you think about your ideal tenant, you immediately think of someone who pays their rent on time, respects your property and follows your rules. But how can you reject the applicants who do not meet your standards while avoiding potential legal issues and discrimination claims arising from inconsistent or biased selection processes?
You and your property managers can evaluate applicants more efficiently and make well- informed decisions without crossing the line into discriminatory practices by establishing clear and objective criteria. Consider the following common rental criteria other landlords have found useful in choosing their next tenant.
Credit Score/Credit Report: Whether you establish a minimum score or an acceptable range, an applicant’s credit score is a strong indicator of their financial history and responsibility, giving you a sense of how likely they are to pay their rent on time. The score you will accept should be based on the location and kind of property you own. For instance, you will probably require a higher minimum score for an upscale rental and accept a lower score or range for a workforce property.
What to specify
State the minimum credit score or range you will allow. If the applicant’s score is below the stated criteria, you may ask for a higher deposit or guarantor.
A bankruptcy discharge within the past 3 years will result in a denial of the application. Keep in mind that bankruptcies can stay on a credit report for up to 10 years, so choose a timeframe that aligns with your comfort level.
An unpaid collection related to the rental such as unpaid utilities or money owed to a property management company will result in denial of the application.
DENIABLE FACTORS
Credit score under your minimum requirement.
A bankruptcy charge within your stated timeframe.
An unpaid rental- related collection.
An unverifiable government-issued ID or Social Security Number (SSN). Note, in some states like California, you cannot deny an applicant if they do not have an SSN, but you can require a government-issued ID.
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Gross Income: Of course, you want to feel confident that an applicant can afford their rent and other living expenses. You can judge this by setting a minimum standard for gross income. Most landlords require a gross income of about 2.5 or 3 times the monthly rent. You can verify gross income through documentation, such as pay stubs, job offer letters, tax returns, and bank statements. Some states have specific laws surrounding source of income. Read more about source of income discrimination here.
DENIABLE FACTORS
Cannot meet income requirements.
Falsification of income.
Lack of proof of income.
Employment History: The ideal tenant must be gainfully and consistently employed. This criteria can be validated by adding AAOA’s Employment Verification to your tenant screening order.
DENIABLE FACTORS
Cannot verify employment through the employer.
Falsification of paystubs.
Rental history: Applicant must not have been evicted from any rental property over the last seven years. AAOA’s Landlord Verification can also be added to your tenant screening order to determine their rental history.
DENIABLE FACTORS
Broken lease agreements.
Any past evictions.
Rental application fraud.
Damage to the property.
More than one late payment and/or noise complaints.
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Criminal record: An AAOA Criminal Report will expose an applicant’s criminal history for felonies and violent offenses over the past seven years. Only convictions will appear on the report.
DENIABLE FACTORS
The manufacture, possession, or sale of controlled substances.
First- and second-degree convictions for such crimes as murder, kidnapping, manslaughter, theft, forgery, burglary, robbery, arson, and sexual offenses.
This list must be presented to every prospective tenant who asks about renting your property. Have them sign a copy to prove that they have received it and that they understand the criteria. That simple action will show that you are fair, objective and apply the same requirements to every applicant. It will protect you against a possible Fair Housing lawsuit and help you find a good tenant.
NANCY ABRAMS Assistant Editor American Apartment Owners Association (866) 579-2262 nancy@aaoa.com
Nancy Abrams has enjoyed a long career in real estate marketing throughout Southern California and Las Vegas. She formerly represented 19 Merrill Lynch Realty branch offices, property managers The Roberts Companies, new home developers, including master planned communities Peccole Ranch and The Valencia Company and shopping centers for Sandy Sigel of NewMark Merrill.
Disclaimer: All content provided here-in is subject to AAOA’s Terms of Use. Nothing contained on this website constitutes tax, legal, insurance or investment advice, nor does it constitute a solicitation or an offer to buy or sell any security or other financial instrument. AAOA recommends you consult with a financial advisor, tax specialist, attorney or other specialist who is able to properly advise you.
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The CDC forced you to house non-paying tenants during the COVID eviction moratorium. The United States Constitution requires the federal government to provide just compensation if it deprived you of the use of your property. COVID EVICTION MORATORIUM LOSSES?
Now it’s time to recover what you lost. File for compensation now Free legal consultation to qualify Pay no legal fees
LEARN MORE
Contact Us (888) 952-5242
PAGE 9 OFFICES: WASHINGTON, D.C. | SARASOTA, FLORIDA | SEATTLE, WASHINGTON
If you’re a property manager or investor, you know how quickly the industry is evolving. Unfortunately, many traditional property management systems (PMS) just haven’t kept up. While they might have been cutting-edge when they first launched, today they often feel outdated, clunky, and inefficient. IS IT TIME TO UPGRADE YOUR PROPERTY MANAGEMENT SOFTWARE?
These legacy platforms were built before cloud computing, mobile accessibility, and modern APIs became standard—and it shows. If you’ve ever struggled with an unintuitive interface, slow customer support, or a lack of flexibility as your portfolio grows, you’re not alone. Next-generation PropTech solutions are changing
the game by addressing these issues head-on. They provide a smarter, more integrated, and scalable approach to property management. Instead of dealing with fragmented systems that don’t communicate with each other, a modern platform offers a seamless, all-in-one solution that streamlines everything from rent collection to accounting.
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WHAT’S WRONG WITH LEGACY PROPERTY MANAGEMENT SOFTWARE? If your current PMS is making your job harder instead of easier, you’re probably dealing with one (or all) of these common issues:
Cumbersome and Hard to Use: Some platforms require extensive training just to navigate, slowing down your team and leading to errors.
Slow or Unresponsive Customer Support: Waiting days (or even weeks) for help can be frustrating, especially when a tech issue is disrupting operations.
Limited Integrations: Many older systems don’t integrate well with modern tools, creating isolated data collections and forcing you to manually transfer information.
Lack of Scalability: As your portfolio grows, your software should grow with you. Unfortunately, many legacy platforms struggle to support larger, more complex operations.
AS YOUR PORTFOLIO GROWS, YOUR SOFTWARE SHOULD GROW WITH YOU.
These pain points can add up, leading to inefficiencies, frustrated tenants, and lost revenue. But the good news? Next-Gen PropTech solutions are built to eliminate these issues while helping you scale.
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7 BENEFITS YOUR PROPERTY MANAGEMENT SOFTWARE SHOULD BE PROVIDING Switching to a next-generation property management platform is a big decision. It’s about more than keeping up with the times — it’s about optimizing your business for growth, efficiency, and profitability. Here’s what you can expect from a modern PMS (with Revela software as our example):
Intuitive and User-Friendly Interface: Next-gen platforms prioritize ease of use, allowing you and your team to get up to speed quickly without extensive training.
Fast and Reliable Customer Support: Modern PropTech companies understand the importance of timely assistance. Every Revela user gets a designated Customer Success Representative who is based in Detroit, Michigan. Seamless Integrations and API Access: Unlike traditional PMS platforms that operate in silos, modern systems integrate effortlessly with third-party tools. For example, Revela is the only property management software with a fully open API, making it easy to connect with other essential tools in your workflow. Scalability for Growth: As your portfolio expands, your property management system should keep up. Next-gen platforms handle growth seamlessly, providing consistent support whether you manage 100 units or 10,000. Data-Driven Insights for Smarter Decision-Making: AI-powered analytics give you real-time insights into property performance, maintenance needs, and tenant behavior. Instead of reacting to problems, you can proactively optimize operations, reduce costs, and maximize profitability. Automated Rent Collection and Delinquency Management: Forget chasing down late payments. AI-powered automation ensures rent is collected efficiently and reminders are sent through multiple channels (email, text, phone calls, and even mailed notices). One property operator using Revela boosted their rent collection rate from 80% to 96.5%, all while saving $140,000 annually by avoiding the need to hire additional accounts receivable staff. Enterprise-Grade Accounting Without the Hassle: Managing financials doesn’t have to be a headache. Modern platforms offer automated payables, real-time reporting, and pre-set approval workflows to simplify bookkeeping and reduce errors. With Revela’s proprietary accounting system, property managers and investors can track all receivables, payables, fees, markups, and rental income — all in one place.
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LEADING THE NEXT GENERATION OF PROPTECH While many property management platforms are stuck in the past, Revela is designed for the future. The platform is built to evolve, adapting to meet the industry’s biggest challenges as they’re presented. For instance, in today’s high-inflation, low-liquidity market, real estate firms and property managers can’t afford to rely on yesterday’s technology. That’s why Revela is the first and only PMS to integrate money lending directly into the platform — giving property managers and investors the financial tools to maximize income, preserve cash flow, and scale with confidence. Whether you’re starting out or leading a multi- generational firm, Revela supports success at any stage. With a customer-driven approach, the platform continuously evolves to streamline operations, increase cash flow, and drive efficiency — ensuring your business is always equipped for what’s next.
FINAL THOUGHTS: IS IT TIME TO UPGRADE?
ONE PROPERTY OPERATOR USING REVELA BOOSTED THEIR RENT COLLECTION RATE FROM 80% TO 96.5%
If your current property management software feels like it’s holding you back, it probably is. Next-gen solutions like Revela offer a smarter, more scalable, and more profitable way to manage properties. By upgrading, you’re not just improving efficiency — you’re future-proofing your business for long-term success. Ready to make the switch? Now’s the time to move beyond outdated systems and embrace a next- generation PMS that actually works for you… and with you. Schedule your demo now to get started.
GRANT DRZYZGA Founder & CEO Revela Inc.
Grant Drzyzga is the founder and CEO of Revela, an all-in-one property management tech platform. While studying Philosophy, Politics and Economics at Brown University, Grant experienced the broken processes of property management firsthand during a 3-day heating outage at his apartment. His curiosity and audacity led to the inception of Revela, which has grown to manage hundreds of thousands of assets and tens of billions of dollars in real estate. Grant and his team continue to expand Revela’s capabilities and services, including accounting, client success support, lending and insurance solutions as well as credit and banking innovations.
PAGE 13
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PAGE 14
When the pandemic hit in 2020, the world shut down and business owners faced unprecedented economic challenges. The COVID eviction moratorium hit some landlords especially hard, forcing them to house non-paying tenants while often receiving no financial compensation. Many landlords have never recovered those losses. However, there is a path to recovery from a collectable and responsible party, the federal government. FIGHTING TO RECOVER LOST RENT FROM THE COVID EVICTION MORATORIUM LANDLORDS LEFT BEHIND: FEDS IMPOSED A NATIONWIDE FREEZE ON EVICTIONS FOR OVER A YEAR In September of 2020, the Centers for Disease Control (CDC) enacted an eviction moratorium barring eviction of nonpaying tenants who claimed economic hardship from COVID. The moratorium essentially allowed tenants to stop paying rent if they claimed certain economic impacts. Many tenants took full advantage of the opportunity. The federal government extended the eviction moratorium several times until it finally ended in October of 2021. SOME LANDLORDS COULD NOT ABSORB THE LOSSES The eviction moratorium devastated some landlords stuck with tenants who did not or could not pay their rent. The federal government’s protections offered little to no support for property owners who relied on rental income to survive. Other landlords were able to weather the losses, but they impacted the bottom line.
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US CONSTITUTION OFFERS A PATH TO COMPENSATION Fortunately, the Fifth Amendment to the US Constitution offers a remedy for these landlords in the form of a federal takings claim. The Fifth Amendment says that the government cannot take private property for public use without offering fair compensation. The CDC’s eviction moratorium took away some of your important property rights. When the federal government takes your property without paying for it, you can bring suit to collect the monies you are owed. COURT OF FEDERAL CLAIMS ADJUDICATES CLAIMS AGAINST THE FEDERAL GOVERNMENT FOR TAKING PROPERTY WITHOUT JUST COMPENSATION A court of national jurisdiction in Washington, DC awards damages against the federal government for depriving citizens of their property. This is called the Court of Federal Claims. This court has the jurisdiction to award landlords compensation for their losses if the court determines that the landlords’ property was taken. STEPS TO PURSUE COMPENSATION If you’re a landlord who was affected by the eviction moratorium, you may be eligible to get compensation from the federal government. Here’s what you need to get started: GATHER INFORMATION Compile all documents you may have to show that your tenant did not pay you rent between September 4, 2020, and October 3, 2021. These documents can include communications between you and your tenant, financial records, or any other documents you may have that show your tenant refusing to pay rent. STEP 1:
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EVICTION PROTECTION DECLARATION During the eviction moratorium, to be eligible for the moratorium, tenants needed to provide their landlord a copy of the CDC’s Eviction Protection Declaration. When completed by the tenant, this form barred the landlord from evicting eligible tenants. STEP 2:
CALCULATE THE FINANCIAL IMPACT Create a monthly list comparing the amount of rent you expected to collect with what you were paid by your tenant. This can help demonstrate exactly how much money you lost. Compile evidence of other losses. STEP 3:
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HOLDING THE FEDERAL GOVERNMENT ACCOUNTABLE FOR THE IMPACT OF THE EVICTION MORATORIUM The eviction moratorium placed the burden of a public health crisis squarely on the shoulders of landlords, while offering little to no support in return. Filing a claim is a way to hold the government accountable and send a message that property rights matter. For impacted landlords, the loss of rental income was a harsh blow. These funds could have been used to pay mortgages, cover property taxes, maintain buildings, or support families. By seeking compensation, landlords can make up for their losses and begin rebuilding what was taken from them. READY TO TAKE THE NEXT STEP? If you’ve been financially harmed by the COVID eviction moratorium, it’s not too late to exercise your constitutional right to compensation from the federal government. The attorneys at mctlaw have litigated in the US Court of Federal Claims for decades and represent property owners nationwide.
BY SEEKING COMPENSATION, LANDLORDS CAN MAKE UP FOR THEIR LOSSES AND BEGIN REBUILDING.
Find out if you qualify with a free case review. Visit our firm at https:// www.mctlaw.com/federal-takings/ eviction-moratorium/ or call us at 888-720-8685.
ALTOM M. MAGLIO Attorney mctlaw
Altom Maglio is a founding partner of mctlaw, a national litigation firm. The firm represents clients across the country in cases against the federal government. Altom is a past president of the Court of Federal Claims Bar Association and presently serves on the Court’s Advisory Council and on the Takings and Tribal Claims subcommittee.
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The rental market is evolving at an unprecedented pace, and 2025 marks a critical moment for property managers and owners striving to remain competitive. With 73% of renters reporting that smart home features significantly influence their leasing decisions, meeting these demands is no longer optional—it’s essential to drive success. SOLVING 2025’S TOP RENTAL CHALLENGES THROUGH DIGITAL TRANSFORMATION
KEY TRENDS DRIVING DIGITAL PROPERTY TRANSFORMATION IN 2025 The current landscape for small property owners presents a mix of opportunities and challenges. According to Redfin, rental demand is on the rise, with renter households growing 3X faster than homeowner households. Small multifamily property owners are at an advantage as they face fewer bureaucratic hurdles, allowing them the flexibility to offer customized solutions to meet the smart home demands their residents desire. Today’s property owners can also take advantage of tax incentives like 1031 exchanges and deductions for property improvements. Shifting consumer preferences, including remote work and on-demand deliveries, further drive
Now is the time to embrace digital transformation across your properties to stay competitive and future-proof your real estate portfolio.
Adopting smart home and access solutions helps:
• Reduce time-consuming maintenance and onboarding tasks
• Attract and keep residents
• Enhance security
• Deliver long-term ROI
PAGE 20
73 % of renters say smart home features influence their leasing decisions 20 % of rental operators reported an increase in maintenance sta e ciency due to keyless access $ 35 to $ 50 more Tenants are willing to pay per month for most smart home products 3 % Rental operators reported a reduction in their CAPEX operational budget due to keyless access the demand for tech-enabled spaces. By embracing these trends, property managers can differentiate themselves in a competitive market and more easily justify premium rental fees. Challenges for property owners also bring growth opportunities. Property crime is still a top concern for Americans, according to SafeWise, while evolving tech and green building regulations may add costs. Additionally, increased competition from single-family, built-for-rent (SFBFR) properties highlights the need for digital transformation to drive ROI and stand out.
RENTAL DEMAND IS ON THE RISE, WITH RENTER HOUSEHOLDS GROWING 3X FASTER THAN HOMEOWNER HOUSEHOLDS.
HOW TO START YOUR DIGITAL TRANSFORMATION WITH SMART LOCKS Start by looking for technologies that can address property showings while mitigating challenges, such as smart access solutions. Smart access solutions have emerged as the cornerstone of digital transformation.
Smart access control technologies:
• Enhance security
• Reduce manual administrative tasks
• Enable easy visitor access
START BY LOOKING FOR TECHNOLOGIES THAT CAN ADDRESS PROPERTY SHOWINGS.
• Attract residents seeking modern conveniences
PAGE 21
Consider smart locks, for example. Smart locks provide keyless access for residents and remote management capabilities for property managers. Residents can unlock doors with a smartphone, smartwatch, or PIN code, eliminating the need for physical keys and the risk of lost or stolen keys. For property managers, smart locks reduce operational headaches by eliminating rekeying costs and enabling self-guided unit tours. Smart video intercoms similarly offer keyless access alongside video surveillance features. Now residents and/or property managers can see and talk to guests before granting access. They also streamline visitor management by enabling temporary guest access for friends and visitors. These conveniences are especially attractive to tech-savvy residents using on-demand delivery apps and services.
With cloud-based access control solutions like these, property owners can streamline operations even with limited budgets and resources. These platforms allow remote management of many properties while reducing the need for on-site staff. Scalable for properties of all sizes, they also simplify access management, empowering smaller operations to compete in a competitive market.
SMART LOCKS REDUCE OPERATIONAL HEADACHES BY ELIMINATING REKEYING COSTS AND ENABLING SELF-GUIDED UNIT TOURS.
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PROPERTY OWNERS CAN STREAMLINE OPERATIONS EVEN WITH LIMITED BUDGETS AND RESOURCES. HOW DIGITAL TRANSFORMATION CREATES VALUE AND RENTAL INCOME The financial benefits of digital transformation in rental properties are well documented. A 2022 survey from rent.com found that tenants are willing to pay $35 to $50 more per month for most smart home products. And according to a recent Parks & Associates survey of US multifamily owners, operators, and property managers, 20% of respondents reported an increase in maintenance staff efficiency due to keyless access and a 3% reduction in the CAPEX operational budget. Digital transformation delivers value beyond dollars and cents. Smart security solutions reduce incidents by both deterring and in some cases, detecting risks, such as unauthorized entry. Adaptable technologies also help meet evolving resident needs, fostering stronger communities. Ultimately, improved resident satisfaction drives lower turnover rates. In fact, the same Parks & Associates survey found that 39% of multifamily tenants consider property-provided smart home devices a key differentiator when looking for their next home. While not directly tied to your profits, each benefit helps your property’s long-term success. By prioritizing smart technologies, you create a reputation for offering safe, modern, and convenient living experiences that drive long-term ROI.
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DIGITAL TRANSFORMATION: THE FUTURE OF RENTAL PROPERTY MANAGEMENT As 2025 unfolds, digital transformation is
enabling property managers to adapt to emerging rental market trends. From community-focused amenities catering to hybrid work, to AI-powered tenant screening, the industry is evolving rapidly. The time to act is now. Embracing these changes will not only set your property apart but also secure its long-term success in an increasingly competitive market.
EMBRACING THESE CHANGES WILL NOT ONLY SET YOUR PROPERTY APART BUT ALSO SECURE ITS LONG- TERM SUCCESS.
Watch the on-demand webinar, “New Year, New Opportunities: Navigating Property Investments in 2025,” where you’ll gain valuable insights into using digital technologies to maximize ROI, meet evolving tenant needs, and seize new market opportunities.
REBECCA PETERSON Director of Community Product Management, Access Controls LiftMaster®
With over a decade of experience in the fire, security, and access control industries, Rebecca has successfully launched more than a dozen innovative products. Backed by an MBA in Marketing and a degree in Electrical Engineering, she combines technical ability with strategic insight to deliver solutions that enhance security and operational efficiency.
PAGE 24
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PAGE 25
All good things must come to an end, including the tenure of one’s rental property ownership. The circumstances that prompt a sale decision will vary from owner to owner, but often include such factors as: IS IT TIME TO LET GO OF YOUR RENTAL?
• Maintenance hassles • Looming capital expenditures • Screening and selection regulations
• Rent caps • Eviction nightmares • “Just cause” tenant removal
• Rising insurance costs • Higher state/local taxes • Increasing legal liability • Deposit restrictions
But for rental housing providers who own single family rentals (SFRs), condos and townhomes, there is arguably a more compelling impetus to sell than any of the above issues: your yield as a percentage of your equity may have fallen to unjustifiably low levels. In virtually all other sectors of investment real estate, property values are tied very closely to net operating income. For example, assuming little change in capitalization rates over time, a light-industrial property whose net operating income doubles over 10 years will likely appreciate nearly 100%. In commercial real estate, income drives value. With homes, however, other forces besides rental income drive resale prices. This is because every SFR, condo or townhouse rental is always a potential owner-occupied property. The supply/ demand, macroeconomic, and demographic factors driving owner-occupied home prices
obviously have little correlation to what the rental rates would be for those same properties. The chart on page 27 shows quarterly Fed data for three metrics since Q1 of 1963: home price increases, rent increases, and inflation increases. Note that average rents in the United States have increased at nearly the exact rate as overall inflation, just edging out the CPI in the last few years. Home prices are a different story. Over 60 years, the average U.S. home price has increased by 2,262%, roughly 2.4 times the rate of rent growth (955%).
IN COMMERCIAL REAL ESTATE, INCOME DRIVES VALUE.
PAGE 26
House Prices: 2,262% increase (July 2024)
Average House Prices Average Rental Rates CPI (Inflation)
Quartlerly Increase, Q1 1963 - Q2 2024 https://fred.stlouisfed.org
1963
Rents: 955% increase (July 2024) Inflation: 930% increase (July 2024)
Median Sales Price of Houses Sold for the United States, Dollars, Quarterly, Not Seasonally Adjusted Consumer Price Index for All Urban Consumers: Rent of Primary Residence in U.S. City Average, Index 1982-1984=100, Quarterly, Not Seasonally Adjusted Consumer Price Index for All Urban Consumers: All Items in U.S. City Average, Index 1982-1984=100, Quarterly, Seasonally Adjusted
Put another way, the average rental property purchased in 1963 for $40,000 would be worth approximately $905,000 today. If the rent in 1963 for this house was $300 per month, today it would be $2,865. Not bad, right? Wrong. Assuming a 30% expense ratio after increases in taxes, insurance, maintenance, utilities, etc., the net operating income would be about $24,000 per year. If the equity is $850,000 after sale costs, the property now is earning a mere 2.8% annual yield on equity. Going back only 16 years, the average price of a home in the U.S. has doubled (100%), while rents have increased by 70%. In certain markets on the West Coast, however, there is a much greater
delta between home-price growth and rental growth (e.g., San Diego, South Orange County, Silicon Valley, Seattle). In some of these areas, we routinely see rental properties whose yield—as a percentage of equity—is below 2%. You may be thinking, why should I sell my rental SFR or condo if it has appreciated so well? First, your “dead” equity, if relocated to another property paying a modest 4% annual yield, could generate twice the cash flow of a property only yielding 2%. Perhaps more importantly, the factors that drove your home values up over the last 10 years may not apply to the next 10 years.
IN SOME OF THESE AREAS, WE ROUTINELY SEE RENTAL PROPERTIES WHOSE YIELD—AS A PERCENTAGE OF EQUITY—IS BELOW 2%.
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ASK YOURSELF THIS QUESTION: WILL THESE FACTORS IMPROVE FOR MY PROPERTY OVER THE NEXT DECADE? • Local population growth • Local job growth • Local household formation • State/local taxation • Insurance costs
• Tenant acquisition expenses • State/local landlord regulations • Deferred capital expenditures
If you think these factors are all trending positive for your property/neighborhood, then by all means, hold on to that rental. But if you think your SFR, condo or townhome may not be much more valuable in a few years to an owner-occupier compared to today, you should consider relocating your equity—via a 1031 exchange—into passive property located in a market with greater long-term demographic and economic upside potential.
At 1031 Capital Solutions, we are happy to provide a complementary Cash Flow Analysis for AAOA members and subscribers to RENT magazine. Let us help you make an educated decision on whether to keep, sell or exchange your rental property.
RICHARD D. GANN, JD Managing Partner 1031 Capital Solutions (800) 445-5908 1031CapitalSolutions.com
Richard (Rick) Gann is an attorney, licensed real-estate broker, and general securities principal specializing in 1031 exchange solutions and he is co-author of the book How to Retire from Being a Landlord.
Disclaimer : Disclaimer: This information is for educational purposes only and does not constitute direct investment advice or a direct offer to buy or sell an investment, and is not to be interpreted as tax or legal advice. Please speak with your own tax and legal advisors for advice/guidance regarding your particular situation. Because investor situations and objectives vary, this information is not intended to indicate suitability for any particular investor. The views of this material are those solely of the author and do not necessarily represent the views of affiliates. Statistical data contained in this material was obtained from third-party sources believed to be reliable; however, 1031 Capital Solutions, CIS, CAM, and CIA do not guarantee the accuracy of the information. Past history is not indicative of future results. Securities offered through Concorde Investment Services, LLC (CIS), member FINRA/SIPC. Advisory services offered through Concorde Asset Management, LLC (CAM), an SEC registered investment adviser. Insurance products offered through Concorde Insurance Agency, Inc. (CIA). 1031 Capital Solutions is independent of CIS, CAM and CIA.
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For remote landlords, filling vacancies can be the hardest part of the job. Coordinating tours, ensuring property security, and screening potential tenants— all from a distance— isn’t impossible. It requires the right tools in order to achieve streamlined operations and reduce vacancy periods without sacrificing security. 4 ESSENTIAL TOOLS EVERY REMOTE LANDLORD NEEDS TO FILL VACANCIES A comprehensive solution integrates four components of self-scheduling, ID verification, smart locks, and security cameras to help remote landlords efficiently fill vacant units. This article will explain why the solution remote landlords are looking for must be comprehensive, as each piece of this puzzle is ineffective when it stands alone. Let’s explore these essential tools and how they work together to simplify remote property management and simultaneously protect property from extended vacancies, squatters, identity fraud, and undesirable leasing arrangements with poorly vetted tenants.
Smart Locks Add Convenience, But Need a Security Protocol
One of the biggest hurdles for remote landlords is managing property access. Smart locks are the obvious answer. There are several on the market, but not all are capable of meeting the needs of a remote landlord. That being said, these locks eliminate the need for in-person key exchanges, saving time and effort for both landlords and renters. By granting access remotely, smart locks lift a hefty burden from the remote landlord’s shoulders, but present massive security risks without other tools in place. This is why simply installing a smart lock without a visitor management protocol is not a viable solution for remote landlords. Other simple solutions are commonly advertised but defeat their own purpose, such as generating unique and expiring access codes, which are easily shared with unauthorized parties or generated by fraudulent parties in the first place. To address this, property management apps that coordinate smart lock access control, such as Instashow+, create a command center for smart lock access that relies on secure visitor onboarding as they create profiles, and biometric verification to begin each tour.
SIMPLY INSTALLING A SMART LOCK WITHOUT A VISITOR MANAGEMENT PROTOCOL IS NOT A VIABLE SOLUTION FOR REMOTE LANDLORDS.
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2. Security Cameras for Peace of Mind
Monitoring property tours is crucial for security and asset protection, whether you’re remote or local. By integrating cameras with a property- management app, landlords are alerted to all arrivals for tours and directed to relevant user information. By watching along as property tours are underway, remote landlords can answer questions, combat visitors’ insecurities regarding the property, and collect data about what sparks interest and comment for visitors over the course of their tours.
This tool is also especially effective for capturing potential squatters or thieves in the act of a break-in. Without security camera footage, it can be difficult to prove a squatter has entered without permission As most states require all involved parties to consent to being recorded, it must be displayed on your property that cameras are in use. For this reason, some retailers of cameras that monitor property tours include sticker-backed signage in order to present this information to visitors immediately.
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3. ID Verification for Tenant Screening
OVER 70% OF LANDLORDS REPORTED A RECENT INCREASE IN FRAUDULENT APPLICATIONS.
Verifying a prospective tenant’s identity is the key step in preventing fraud and unauthorized entry. While conspiracy-like notions about modern capabilities regarding identity verification create a false sense of safety, rates of identity theft and fraud in the real estate space are of major concern. In fact, a recent study from the National Multifamily Housing Council and the National
Apartment Association states that over 70% of landlords reported a recent increase in fraudulent applications. It is not enough to collect identity information from users; apps that grant access to private property need to biometrically verify an individual’s identity every time they attempt to use the service and unlock a door.
As part of a comprehensive solution for remote property tour management, an adept, efficient, and effective verification protocol functions in these ways:
• Collects identity information and documentation during account creation, such as government-issued IDs and proof of income • Runs an initial background check • Uses live video to biometrically verify a user’s identity during account creation and as part of the “key” to unlocking doors for property tours • Allows landlords to set standards and gate access to their property based on provided documentation and financial eligibility • Creates an access record for a particular property in real-time
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4. Self-Scheduling for Tour Management
A TOUR-SCHEDULING SYSTEM FUNCTIONS AS A REMOTE LANDLORD’S ASSISTANT.
A tour-scheduling system functions as a remote landlord’s assistant, automating the process of coordinating property tours by allowing interested renters to book available tour slots. This eliminates time-consuming back-and-forth communication, reduces scheduling conflicts, and communicates to all involved parties with reminders and notifications.
With automated scheduling, landlords can focus on other tasks while their properties continue to receive interest from potential renters. Self-scheduling also reduces the frequency of “no-shows” and increases rescheduling so that more scheduled tours come to fruition.
CONCLUSION All-in-one solutions to modernize property management are available on the market today, but few tout excellence in each of the four areas we’ve covered. Working towards a structured procedure for vacant units with these tools will help remote landlords streamline operations, enhance security, and fill vacancies with desirable tenants.
LEAH MAHER Marketing Consultant InstaShow | Boxlty Access Systems
Leah is a marketing consultant and copywriter in Pennsylvania, currently working with InstaShow to articulate how their software solutions are designed by and for real estate professionals to make their lives easier. With a degree in Media Studies and Business from Temple University, exploring and understanding the symbiosis between society and technology is a longtime passion for Ms. Maher.
Works Cited Novo. “Maximize Rental Property Potential with Self-Guided Tours.” InstaShow+, 29 Jan. 2025, instashowplus.com/how-to-manage-showings-like-a-pro-in-2025/. Rothstein, Ethan. “Apartment Owners Report Surge in Rental Application Fraud.” Bisnow, 24 Jan. 2024, https://www.bisnow.com/national/news/multifamily/ apartment-owners-report-surge-in-rental-application-fraud-122537
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Every landlord, property owner, and investor in California has been feeling the effects of the ongoing insurance crisis. The consequences for investors have been further financial strains due to the increased operating costs that have affected profitability., The only way to recoup losses has been to cut corners in other ways or to increase rents (if allowed). TAKING A LOOK AT CALIFORNIA’S INSURANCE PROBLEMS
While insurance used to be more of a tertiary concern, it’s now firmly a secondary, if not primary, consideration when budgeting for operational costs. The California crisis was always projected to get worse before getting better – so is there an end to this madness in sight? Well, it depends on how good your vision is. After the horrible wildfires of early 2025, State Farm stated that their reserves already are at risk. Their recently released statement said they have $1.4B in reserves and they’ve already paid out $1B this year. Because of this, they have filed for emergency relief with the California Department of Insurance for approval to implement immediate rate
increases, averaging 22%, to try to supplement their reserves. Due to their previous underpricing in the state (over the past approximate decade, for every $1.00 they’ve charged, they’ve paid $1.26 out), pricing increases going forward are inevitable. On the plus side, California has started rolling out new regulations to incentivize more insurers to remain in California by allowing carriers to increase premiums in higher risk areas. This move should hopefully bring some relief later this year. In January of 2025, the California State Commissioner implemented a mandatory one- year moratorium on insurance non- renewals in the L.A. area. At least for now, that move will keep some properties from having to go to an inherently pricier option.
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RATE INCREASE 22%
Consider taking the following actions to safeguard your investment:
1
Look into fire-proof building materials (fire- resistance roofs and gutters) Keep roofs and gutters clear of debris at all times. Exterior wooden decks and fences should be sealed. New construction should focus on non- combustible materials. Keep all flammable materials away from their properties (pine straw, dried leaves, yard debris, etc.) Create fire-stopping landscape features. Do not allow any type of grilling or smoking on your premises. If grills are allowed, make sure they are in a safe, non-combustible area of the property away from wood-frame buildings and easily ignitable landscape features.
$ 1.26 PAYOUT PER
CHARGED $ 1.00
2
3
4
Despite these ongoing efforts, the outlook for the California insurance market still remains uncertain. The combination of natural disasters and insurers' financial challenges suggests that the multifamily insurance market in California will continue to face difficulties for the foreseeable future. That being said, there is still the California Fair Plan for those with no other feasible options to consider. Those that do have alternative options will still face an uphill battle trying to find reasonable insurance markets right now, so it’s best if property owners can take more initiative on how to take care of their investments to prevent risk.
Looking forward, those properties that are near a wildfire zone should heavily consider alternate options outside the insurance space to protect their investments. Lastly, always remember to do your due diligence when looking for insurance carriers. Make sure the agencies you work with are familiar with your industry and have access to the markets that will be the best fit for your portfolio. While going through these uncertain and tumultuous times, it’s always good to have trusted partners you can rely on and can guide you through this difficult terrain.
5
6 7
LAUREN LIEB Sr. Commercial Risk Advisor InsuranceHub (678) 812-2516 LLieb@insurancehub.com
Lauren has been with InsuranceHub for over 10 years and specializes in advising clients all around the country in regard to their multifamily and other lessor’s risk properties. When she is not helping her clients, you can find her fostering dogs for animal rescues (and only occasionally keeping them). She originally hails from Ohio, but now lives in Decatur, Georgia with her husband and menagerie of pets.
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