Journalist, Stacker

You might not realize it, but you have all the information a hacker would need to steal your tenants’ identity. Are you doing enough to keep it safe?

What Every Landlord Should Know About Cyber Security

If you're a landlord who self-manages their rental home, you have all the information a hacker would need to steal your tenants’ identity. Are you doing enough to keep them safe?

At first blush, the relationship between property management and cyber security might seem tenuous at best. “I’m self-managing one (or two) properties by email. I’m worried about finding a decent plumber, not getting hacked.” 

But think for a second about all the information you have on your tenants. You have their social security numbers. You know their previous addresses and their current address. You know their birthdays, their bank account information, and their credit card number. 

If a hacker got their hands on all that data, they’d have a field day. They could have enough information to steal two identities – yours, and your tenants. So not only would you have a big mess on your hands, but you might even have some legal liability if you didn’t take reasonable precautions. All this makes it doubly incumbent on landlords and property managers alike to closely guard the reams of personal data they have on hand.

Be prepared to safeguard tenant information

The first thing to stop and think about is whether you are literate enough yourself about how to protect your computer and mobile phone from attackers. Think of it as “data hygiene” and “data health” – you need to understand it, and put in the work to stay healthy, just like you do when it comes to personal wellness.

Start with making sure none of your passwords have already been hacked. Search your email address on HaveIBeenPwned.com to see if any of your personal information is already out there and if any of your passwords have been compromised.

Even if you’re the rare individual who’s never been hacked – and has never given a password or your personal data to a company that’s been hacked – we still recommend having 2-step authentication in place (in fact, anywhere it’s offered, we recommend turning it on). Also make sure that you’re using a strong password that includes symbols, numbers, and capital and lowercase letters. 

Most breaches are the equivalent of leaving the front door open. The most significant risk is from schemes like “phishing” emails – where an email seems legitimate, you download it, and through that you allow a virus to enter your computer and potentially steal whatever data it holds.

When it comes to defending against such an attack is you: be vigilant, skeptical, and hesitant before opening any attachment you receive via email, even if it’s from someone you know – maybe they fell victim to a phishing attack, and hackers are using their address book and contacts to find their next victim.  

Another method of preventing phishing attacks – and any attack that uses malware – is antivirus software. Programs like Norton and Avast will scan these attachments before allowing your computer to download them to see if they contain any malicious code. 

Even if you do your best to protect your data, we live in an interconnected age. Every app and software program you use – Microsoft Word, WhatsApp, Dropbox – is vulnerable. In fact, every second of every day, hackers are doing their best to compromise those platforms. These companies spend billions to protect themselves, but we have all seen the headlines about breaches involving millions.

Sometimes, a breach of one of these platforms gets patched – so stay alert, and if there is an update available that patches a breach, do it immediately. For instance, Apple and Microsoft regularly release security patches and updates to address vulnerabilities. In some cases – like when Equifax was breached – the company offered free identity protection. 

Of course, in defending yourself against hackers and data breaches, you’re also defending your residents – not to mention the people who might have submitted an application that included a wealth of personal information but who, for whatever reason, didn’t get the house or apartment. 

There are things you can and should do, though, to further defend those people.

The first step in protecting people’s personal information is getting rid of it – especially if you no longer need it. So once a lease is signed and a new resident is moving in, delete all the other rental applications you received for your home. Get it off your computer and out of your email account. That way, if you get hacked, there will be less information for bad actors to exploit. 

We also recommend encrypting any files you need to hold onto – for instance, the rental application you received from your current residents and their lease agreement. If they’re PDFs or Word documents, it’s surprisingly simple to encrypt them and password-protect them

The next step is to restrict access to the information you do need to hold onto. This shouldn’t be a huge problem if you’re self-managing your own property, but if there are other people intimately involved with the process – if, say, you have a handyman you use all the time to help with smaller maintenance requests – limit their access to only the documents and information they need. 

We’ve written before about how IoT devices like smart locks and thermostats can make life easier for landlords and homeowners. But those too are exploitable points of access for hackers.

The stakes are different in this case; if your smart lock is hacked, that isn’t going to make your tenants’ identities vulnerable to theft.

But significant physical damage can be inflicted on your property such as a device being breached. A hacked smart lock could make it impossible for your tenants to gain entry, creating massive inconvenience. Even worse, it could allow intruders into your rental property, which could result in theft or assault.

Of course, these are unlikely possibilities – and the convenience factor offsets the rare risk – but it is worth understanding the full picture. 

Along similar lines, it’s important to control access to your WiFi systems: never use the default password the router and modem came with, and make sure you’re using a WPA2 network, and not a WEP. 

Find someone you can trust with your data

As a  modern, tech-forward property management company, backed by leading venture firms, Belong understands cybersecurity risks and works with best-in-class vendors to secure their platform. While threats are pervasive, as we indicated before, if you have any specific questions, we invite you to ask us. Similarly, you should ask the property manager you are dealing with now – and any you are considering – the same questions. The answers may surprise you!

California’s single family zoning laws have changed under SB-9, providing new financial opportunities for homeowners in CA through renting.

SB9 And The Financial Opportunities for Californian Homeowners

Single-family zoning laws have changed in California under Senate Bill 9 (SB-9), creating real financial opportunities for eligible homeowners.

For decades, California’s single family zoning laws saw incremental rather than tectonic shifts. But the housing shortage has changed that, and changed it profoundly.

The first revolution brought the phrase “ADUs” – or Accessory Dwelling Units – into the public consciousness. It gave homeowners greater latitude to convert under-utilized spaces within their homes (think garages, basements, and attics) into livable, rentable spaces, and also incentivized the construction of free-standing cottages and guesthouses on their property.

If you’re a homeowner looking to generate incremental rental revenue, building an ADU is a potential opportunity. Similarly, Senate Bill 9 offers a potential subdivision opportunity. Which means you could keep living in your current house, and build a new rentable structure alongside it.

This second revolution, which came into affect in January 2022 makes provisions for dividing properties, allowing homeowners to split a single-family lot into two lots, add a second home to their lot or split their lot into two and place duplexes on each. The last option would create a maximum of four housing units on a property currently limited to a single-family house.

That represents a dramatic change from current regulations, wherein a single-family lot is only permitted to contain a free-standing house and an accessory dwelling unit, plus an attached junior unit that is 500 square feet or less.

The goal of SB-9 or "the Califonia H.O.M.E Act" is to provide options for homeowners to build wealth while providing affordable rental opportunities to other families. Rather than targeting traditional real estate investors, the bill seeks to benefit homeowners and families, with an owner-occupancy requirement in place as a condition to receiving the lot split. 

Here are some of the most frequently asked questions on SB-9:

Can any homeowner or property owner take advantage of this new law?

Though the laws are fairly accommodating, you can only “upzone” your property if the resulting 2 lots are 1200 square feet or larger. You can’t destroy or alter a house that has been used for affordable or low-income housing in the past 3 years either.  And laws regarding historically landmarked buildings remain unchanged, so you can’t demolish or change one in order to take advantage of SB-9.

Other limitations are that you can’t use the new construction for short-term rentals (less than 30 days); and the owner of the property must occupy the main house on the lot for at least 3 years after construction has concluded. Also the new construction can’t be used as a commercial space.

How can the state predict if I am going to stay in my house for three years?

The folks in Sacramento don't have a crystal ball. But anyone looking to build an ADU must sign an affidavit which represents they will occupy one of the units as a primary residence after the split or the construction of an ADU.

Is it possible to subdivide a lot more than once? 

Nope! No more than four housing units can be created on a single lot. 

How are zoning laws applied to these new constructions?

Except for the fundamental change enacted by SB-9, zoning laws remain intact.

Get help creating a rental unit in California

Between SB-9 and the increased flexibility when it comes to constructing ADUs, it’s never been easier to build a rental unit in California. And with access to Belong and its teams of Pros, it’s never been easier to maintain one. Learn more about how Belong can help you navigate the rapidly changing landscape of California real estate. 

SB9 and Financial Opportunities for Californian Homeowners

See how owners of rental properties can use Qualified Business Income (QBI) Deductions to reduce their tax bill thanks to what’s called a 199A deduction.

What Are Qualified Business Income Deductions For Landlords?

Also known as the section 199A deduction, the Qualified Business Income (QBI) Deduction lets landlords potentially deduct up to 20% of their qualified business income (QBI). Let’s look at this in more detail.

Can I get the QBI deduction on rental income?

The good news is that any non-corporate landlord should qualify for the deduction.

Rentals that are classified as trades or businesses under IRC § 162 are not considered passive. If the management of the rental property rises to the level of a trade or business as defined by § 162, then it qualifies for the deduction. 

Rental properties are typically treated as passive activities—these are excluded from the definition of a qualified trade or business. But it’s important to understand the following:

You might qualify for the QBI if you’re organized as an S-Corporation or a pass-through LLC, estate, or trust (If you’re a C-Corp, you’re out of luck.).

Rental income declared on a Schedule E or K-1 also qualifies.

If you pass hurdle #1, you might qualify if you meet a number of conditions.

If you spent more than 50% of your time during a tax year in your real estate business – and that represented more than 750 hours in the same year, you passed the next hurdle. Congratulations!

The QBI is a deduction that you take on top of the standard deduction if don’t itemize, or the itemized deduction if you do.

But you’re not there yet. Your QBI is subject to limitations based on your taxable income that include the following:

The amount of W-2 wages paid by the qualified trade or business; and

The unadjusted basis immediately after acquisition (UBIA) of qualified property held by the business, which is the basis of the qualified property on the placed-in-service date.


Note that only items included in a landlord’s taxable income can be counted toward the QBI deduction. Some of the most common income sources include rent, non-refundable and forfeited deposits, late payment fees, pet fees, and federal rent subsidies (HUD). This also generally includes, but isn’t limited to the deductible part of self-employment tax, self-employed health insurance, and deductions for contributions to qualified retirement plans.

The safe harbor rule comes into play when a landlord owns a handful of rentals but doesn’t qualify as a real estate professional. In this situation, he or she can still qualify for the QBI deduction, provide the rental activities constitute a trade or business.

The IRS published a notice in 2019 that provides a safe harbor for landlords to qualify for the IRC Section 199A deduction. In order to qualify the three requirements that must be satisfied:

Keep separate books and records to show income and expenses for each rental real estate enterprise;

Perform at least 250 rental services (Or other services, such as those provided by tradesmen and property managers) per year. Activities that satisfy the 250-hour requirement include landlord-related. The IRS says that rental services also include:

(i)         	Advertising to rent or lease the real estate;

(ii)       	Negotiating and executing leases;

(iii)     	Verifying information contained in prospective tenant applications;

(v)       	Daily operation, maintenance, and repair of the property;

(vi)      	Management of the real estate;

(vii)    	The purchase of materials; and

(viii)  	Supervision of employees and independent contractors.

3. Keep contemporaneous records of time reports, logs, or similar documents, such as hours of services performed; dates and descriptions of services performed; names of those performing such services.

Note that the safe harbor doesn’t apply to triple-net leases because the tenant is responsible for costs that would otherwise be the responsibility of the owner. As such, the IRS says that the rental income from a triple-net lease doesn’t qualify as trade or business income. It’s merely investment income.

If a landlord doesn’t qualify for the safe harbor, 20% of his or her rental income may still qualify as trade or business income, if they must meet some additional requirements

In 2021, real estate investors earning over $329,800 (if married and filing jointly) or $164,900 if filing as a single individual can claim the deduction as a percentage of wages paid with respect to the trade or business, or the combination of a percentage of wages paid, plus a percentage of the unadjusted basis of the property. These limitation thresholds are adjusted annually for inflation.

Landlords who own multiple rental properties should note that there are additional planning strategies that can maximize the IRC Section 199A deduction.

The Section 199A deduction is scheduled to automatically expire in at the end of 2025. In order to claim the current section 199A deduction, taxpayers who own real estate must be able to show that they’re operating a real estate business as a trade or business and not simply holding real estate for investment.

Keep in mind that, as helpful as this piece might be, we strongly advise that you speak to your accountant to get a firmer grasp on the implications and ramifications of the laws being discussed here. They will have a much firmer understanding of your individual circumstances and can clarify any questions this post might have raised.

Property management was unsatisfactory for both homeowners and renters - until two entrepreneurs decided it was time to disrupt the old model with Belong.

How Two Entrepreneurs Are Elevating Property Management

Property management was unsatisfactory for both homeowners and renters - until two entrepreneurs decided it was time to disrupt the old model with Belong. Read on for the story of how Belong started and their mission. 

In the case of Belong, our founders – Ale Resnik and O. Savir – were inspired by their experiences with the very act of “Belonging.”

They captured it poignantly and personally in a blog, writing:

We are a company started by immigrants. As immigrants, we had to redefine, multiple times and in numerous ways, what Home meant to us.

Is Home the walls around you and the ceiling above you?

As they began thinking deeply about what home meant – along with another founder, Tyler Infelise – these imaginative serial entrepreneurs had an important revelation about its fundamental essence.

They put it eloquently in that same blog post:

“With time, we discovered that Home isn't a place. Home is a feeling. Home is where our heart is.”

As they looked for their next entrepreneurial venture – conducting a lot of research and spending a lot of time talking to friends and family – an opportunity began to take shape.  An opportunity that involved a total, bottom-up reinvention of something known as “property management.”

Ale and O decided to take on this challenge because they saw that the need was great.  As they wrote, “We chose an industry that hadn't changed in centuries and offered no elements of delight to those it was meant to serve.”

The founders recognized that tenants often feel like temporary guests living in somebody else’s home.  Some are treated badly (we’ve all heard our share of landlord horror stories), and often are treated like second-class citizens.  So the company’s mission – concisely put – is to make tenants feel like they belong. 

Central to the vision that these two founders had was to create a company where people who loved their houses  – Belong calls them “homeowners” –  could be connected to people who would love them as much as they do.

If you’re a homeowner – whether you are downsizing, or are dealing with a long-term family home – Ale and O have built a system and culture where you will be incredibly well looked after.

Read about Belong’s unequaled suite of services here.

Belong will find the perfect residents, screen them, and help them move in – and you move out – with precision and care.  They use technology to streamline, and committed Concierges (people, not bots) to make sure everything runs perfectly. 

Once someone moves in, their full-time team of Belong Pros handles all maintenance – expected and unexpected – which is a remarkable service in a world where reliable and talented contractors are in great demand.  It feels great when work is done right the first time around.

Another benefit of Ale and O’s vision is that happy residents – which they enable – will stay longer and reduce vacancies, which are expensive!

If you’re a homeowner, Belong’s founders have built something that can, candidly, rock your world.  Ale, O, and Tyler wrap it up like this:

“We love building products that make people happy. More specifically, we love surprising people with something they never thought could make them happy.”

Disruption is here. Get ready to be delighted.

Belong

Jordan Newsom

Annalise Mantz

Lauren Slagter

Ashleigh Graf

Jill Jaracz

Jordan Newsom

Annalise Mantz

Lauren Slagter

Ashleigh Graf

Jill Jaracz