Peter Lohmann's Newsletter - Issue #111

FTC Targets Rental "Junk Fees" in 48M Invitation Homes Settlement

Author

Peter Lohmann
September 27, 2024

Invitation Homes Announces FTC Settlement Related to Security Deposits & "Junk Fees”

Quoting from a CBS News article:

Invitation Homes has agreed to pay $48 million to settle federal claims that the nation's biggest landlord for single-family homes deceived renters about lease fees and other costs, while unfairly pocketing tenants' security deposits, the Federal Trade Commission said Tuesday.

The Dallas-based company charged tens of millions of dollars in "junk fees" between 2021 and 2023, the FTC said in a statement. The mandatory monthly fees covered services such as smart-home technology and air filter delivery that could cost up to $1,700 a year, but that weren't disclosed until renters received their lease or sometimes not until after they'd signed it, according to the agency.

So this is interesting and generated a lot of chatter inside Brad Larsen’s PM Mastermind Facebook group when I posted it on Wednesday.

Some takeaways for real estate professionals:

  1. Disclose all fees at all steps of listing and leasing process. Rental listing, rental application, lease, your website, etc.

  2. Consider making optional any mandatory tenant programs, packages, and add-ons.

  3. Ensure your security deposit return (“dispo”) process is fair and equitable. Make sure you have thorough documentation of any item you’re attempting to charge a tenant for, including before/after photos and receipts of the actual cost of the work. Be sure to only charge depreciated prices when appropriate.

  4. Make sure all your tenant fees (such as late fees) are “reasonable” for your market/state and within any legal limits. Don’t make yourself a target.

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Peter Interviews Property Meld CEO Ray Hespen

Property Meld has coordinated $3B worth of property repairs. That’s a big number.

What I love about Ray is that he’s incredibly data-oriented. He can’t help but dive into the numbers, find trends, and develop actionable insights for property managers. He’s a great follow on LinkedIn by the way.

In this interview, we dive into:

  • What has Ray found that is correlated with resident retention?

  • Experience vs. Lease Renewal data

  • Property Owner churn

  • Advice for dealing with investor churn

  • Where do PM responsibilities begin and end in terms of property performance for the owner?

  • What are the most important KPIs for maintenance operations?

  • Standardizing industry metrics

Check it out in your favorite podcast player, or watch on YouTube:

New Property Management Companies For Sale This Week

  • Here is a property management company for sale in Bradenton, FL (asking $ 120k, 16 properties)

  • Here is an STR management company for sale in Savannah, GA (asking $2.2M)

  • Here is a property management company for sale in Hayden, ID (asking $250K)

  • Here is a property management company for sale in Charlotte, NC (asking $1.3M)

  • Here is a property management portfolio for sale in Maryland (asking $100k, 35 doors)

  • Here is a property management company for sale in Cape Coral, FL (asking $425k)

Industry News and Events

  • Crane applications are now closed. Thanks to all who applied & joined! We’re now sitting comfortably at ~100 members and leaning in to provide the best possible experience for them!

  • Rental housing economist Jay Parsons has started a podcast and released the first 2 episodes. More info here.

  • Speaking of Brad Larsen, he’s hosting the BizDev Mastermind Seminar on October 8th in San Antonio, TX. Tix are still available for $399 — check it out.

  • Don’t forget to register for Second Nature’s VIP Experience if you’re headed to Dallas for NARPM’s national conference. It’s free and gets you a sweet ride from the airport & more (I always register).

Closing Thought

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Stats from last week’s issue:

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That’s all for this week! Have a great weekend. -Peter

The content of this newsletter is for informational purposes only and does not constitute professional advice. I may have consulting agreements with, or financial interests in, companies mentioned in this newsletter. Additionally, some of the links included in this newsletter are affiliate links, meaning I may earn a commission if you make a purchase through these links. Always perform your own due diligence before making any financial or business decisions.