How Do Service Dogs Fit Into Your Lease?

service animalEven though landlords are required by law to accommodate tenants with service animals, they can still deny pets. Here’s the difference between them and how to protect your building’s policy.

Many people suffer from physical and mental disabilities so severe that they need a service dog, which not only provides therapeutic support but also helps perform basic tasks. But what if you manage a property with a no-pets policy, and a tenant wants to have a service dog at home with them?

The federal Fair Housing Act prohibits landlords from discriminating based on disability, among other things, so they must accommodate tenants who depend on the assistance of a service dog. That doesn’t mean, though, that they lose their right to ask other tenants not to have animals in the building.

During the property management forum at the 2015 REALTORS® Conference & Expo in San Diego, Judy Keene of the nonprofit Next Step Service Dogs, which matches people with trained canines, urged attendees to understand the difference between a pet and a service animal.

Most dogs that have no formal training to assist a person with a disability can be placed in the “pet dog category,” Keene said. “But service dogs are trained specifically to help a specific person with their disability and perform specific functions.” (Emotional support dogs, which aren’t necessarily trained but are prescribed by a mental health provider, are considered akin to service dogs.)

A service dog may be trained to help a returning war veteran who suffers from post-traumatic stress disorder, for example, by turning the lights on in dark rooms and sniffing them out to make sure there are no safety threats before his owner enters, Keene said.

You have the right to deny tenants’ requests for those animals that are merely pets, but how can you know a tenant is telling the truth when they say their dog is a service animal? There are signs you might be able to pick up on that will tell you whether the animal is a service dog, but, according to the Americans with Disabilities Act, you cannot request documentation of the animal’s service status.

“You can tell it’s not a service dog if it acts badly,” Keene said. “Uncontrolled barking, pooping in the corner, hyperactivity, or constant whimpering or crying is not service-dog behavior.” The law only protects a tenant’s right to have a service dog if the dog is undisruptive to other tenants and under the control of the owner (on a leash outside the apartment) at all times, she added. You have the right to ask that the service dog be removed from the property if these rules are broken – and particularly if the dog poses a threat or hazard to anyone.

But remember that if you advertise a no-pets policy, you’d be wise to also state on your marketing, signage, and lease forms that your policy is subject to tenant’s rights laws to avoid any potential blowback, Keene said.

Note: A previous version of this article misstated that landlords and property managers can request documentation that an animal is a service dog. That is against ADA guidelines.

Navigating the Needs of Emotional Renters

Service animals aren’t the only things property managers should be sensitive to when working with some tenants. A portion of the forum at the conference was dedicated to teaching property managers how to communicate with tenants who struggle with emotional issues, using veterans with PTSD as the example. Helping these veterans find housing as they re-acclimate to society is a point of pride for many real estate professionals, but the process can be as difficult to manage as it is fulfilling.

PTSD and other disorders can present communication barriers that are hard for the average person to understand and adapt to. “With PTSD, your mind is jumping around a lot,” said Linda Stanley, a retired U.S. Air Force major and VA psychiatric nurse. “It’s easy to become overwhelmed, and that may display behaviorally as anger or frustration.”

You don’t want to misread symptoms of legitimate emotional dysfunction as a sign that someone won’t be a good tenant—and end up unfairly denying them housing. Stanley offered pointers for improving communication, and though they’re tailored to people with PTSD, many can be applied to other scenarios.

  • Start with “thank you.” Many people with PTSD are afraid of being stigmatized, Stanley said. If you’re dealing with a veteran, show them your understanding by saying “thank you for your service” before talking business. This will put them at ease for the rest of the conversation, especially if there are complex lease terms to discuss.
  • Choose an appropriate environment. When you meet to go over a lease, do it in a quiet place. “It’s easy to get overwhelmed in areas with loud noises or crowds,” Stanley said. “[Veterans] had to be so aware of their environment at war, it becomes too much.”
  • Don’t talk about too much at one time. If you have certain requests of tenant, explain them one at a time. Lengthy lists of demands can be hard for them to process in one sitting, Stanley said.
  • Let them go at their own pace. Don’t demand that people sign a lease agreement on the spot. Let them discuss it with someone they trust. It’s imperative that they don’t feel coerced into something, explained moderator Ginni Field, who works with vets in her real estate business.


Are Your Tenants On Their Way Out?

caryHave you seen the signs? It happens all the time. You have a great tenant, things have been fine… up until certain things start happening and all of a sudden, you realize that this isn’t the great tenancy you once thought it was.

Recognizing the signs that a tenancy is beginning to sour is helpful, especially before making plans to renew, increase rent, or non-renew the lease agreement.

What Are “10 Signs My Tenants Are On Their Way Out?”

Sign # 1: Rent is getting later and later!

Is your rent becoming later and later each month? Although late rent is usually a sign of a deeper problem, it sometimes is merely a matter of the landlord failing to have a proper late rent procedure in place. Does your lease agreement provide for a late payment penalty fee? If so, do you enforce the late fees when tenants pay late? If not, see my article on Late Fees.

Late rent can also be a sign that personal or financial circumstances in the tenant’s life my have degraded in some way. If this is the case, the problem may not be as easily remedied as it might by enforcing late fees and a rent collection process. You may have to plan on ending the tenancy before problems worsen to a point beyond repair.

Sign # 2: Breakdown in communication with tenant.

All successful tenancies include a healthy method of communication between the parties. When communication becomes extremely difficult between the landlord and tenant, it is often a sign of problems. There should never be a reason the tenant feels he or she must avoid returning a call or any other correspondence with the landlord.

Sign # 3: Lease Violations

Lease violations are sometimes a byproduct of the tenant not knowing what is in the lease simply because the landlord neglected to inform the tenant of the requirements in the lease agreement.

Lease violations can also be a blatent disregard or disrespect of the terms of the agreement in the contract. When the tenant decides to just do whatever he wants, despite the terms of the agreement or the landlord’s rules, you should have your eviction plan ready because your tenancy is in a downward spiral.

Sign # 4: Behavior: Tenant is no longer respectful to the landlord

Obviously a disrespectful tenant is a problem that is not acceptable. When a tenant disrepects the owner , he also disrespects the agreement and also the property itself.

Sign # 5: Tenant asks to apply security deposit as rent

This is usually a sign of financial problems because the tenant is unable to rais the rent money. Some tenants try to apply the security deposit to rent when they plan to move. This is a method of garanteeing thatthe receive their deposit back, while the landlord in the casse of one month deposit, ends up with nothing to pay for damages and other costs incurred by the tenant. See my article What Do I do When my tenant wants to use the security deposit as rent?

Sign # 6: Tenant maintenance responsibilities are being neglected

When your tenant is neglecting the agreed maintenance responsibilities, you’ll need to enforce your lease with a lease violation notice or grounds violation notice. If you don’t bounce the tenant back in ine, things will only get worse and your property and its value will suffer. One remedy that sometimes helps is a Grounds Violation Notice that warns the tenant the problem needs to be solved or the landlord will correct the problem atthe tenant’s expense.

In many cases these problems can be pre-empted with a signed Property Condition Report & Checklist which is a great way to start a tenancy with the tenant acknowledging and attesting to the condition of the rental property.

Sign # 7: Unauthorized Residents

Most of the time, an unauthorized resident situation is a sign of a combination of problems, ranging from

  • financial, because the tenant may have taken on co-tenants for added income to paythe rent,
  • disregard of the agreement,
  • unfortunate changes in the tenant’s life which do not flow parrallel to the terms of your lease

Sign # 8: Unauthorized Pets

In many cases when the lease states “No Pets”, tenants ask for a pet after they’ve already aquired one. When the answer is “no”, the tenant and the landlord often have issues that result in the end of the tenancy sooner or later.
I’d say it is more common that the tenants just sneak the pet in or adopt a pet without asking and feel that it is their right to do so.

Sign # 9: Disputes with Neighbors

It is never a good sign when your neighbors are at odds with your tenants. When you have a tenant that aggravates neighbors through uncooperative behavior, inconsideration or other types of lease violations, you have problems.

Sign # 10: Tenant Complaints on items that fall under tenant responsibilities

As I’ve often said, the lease agreement itself is like an instruction manual for what is expected from the tenant on how to be your tenant and take care of your property. This includes tending to certain tasks, maintenance or duties under the contract. Tenants will often forget what they agreed to when it suits their purpose and call the landlord with requests or complaints about issues that they themselves are responsible for.
It is important for the landlord to be aware of the tenant’s responsibilities besides their own and remind tenants according when situations arise.

There are many other danger signs that a tenancy is in trouble. Feel free to share them if you can think of any on the LPA’s Landlord Q&A Forum under the Subject Title “Signs Tenants are on the Way Out”.

About the author:
As a Real Estate broker / investor in New York, John Nuzzolese has been involved with rentals and investment property since 1979. Besides owning and operating two real estate businesses, he is president and founder of The Landlord Protection Agency, Inc. , an organization specializing in helping landlords and property managers avoid the hurdles and pitfalls and expensive blunders common when dealing with tenants.

More information on The Landlord Protection Agency is available at

What is the Value of a Single Lease Renewal?

Whether you operate a shoe shine stand or a multifamily property your business is built on renewals, or re-occurring income from existing customers.  In multifamily, a high percentage renewal rate makes for a much more predictable income stream.

The value of a lease renewal can be quantified.  Granted, while different for each property, the amount is one that has a direct impact on asset value, particularly when multiplied by their effect on year-over-year Net Operating Income.

Lower turnover, higher profitability

Focusing on renewals has significant downstream impact on operations.  Each renewal equals one less turnover (make-ready) making the math pretty easy.  Use the following math to calculate savings from increases in renewals.

  • A) What is the average costs of a single make-ready?
  • B) What is the average costs of gaining one renewal?

Cost of A minus the cost of B equals direct savings from eliminating a single turnover.

Now let’s apply this to a 100 units development that is experiencing 50% turnover versus the same development with 25% turnover.

If the average costs of  each turnover is $650, then fifty turnovers per years cost $32,500.  Reducing turnover from to 25% from 50% saves $16,250.  Thus, expenditures to secure renewals in any amount less than $16,250 generates real savings.

But wait! There’s More!

This is just the initial, easy-to-calculate savings.  The “real” savings comes from the reduction in days vacant.  Each renewal removes turnover expenditures and days vacant for that particular unit.

In our example from above, with turnover reduced to 25% from 50%, assuming that days vacant were 15 days with rents at $900, then the revenue generated from avoiding these days vacate equates to $11,250 (25 units each vacant for two weeks).

Additional costs savings from increases in the renewal rate show up in the form of make-ready overrun cost avoided, the potential necessity of flooring and fixture replacements and appliances.

The next layer of savings comes in the form of management administrative time.  Maybe a little more difficult to quantify, but a costs all the same.  This includes leasing and make-ready oversight, for example.

Consider the impact on value for properties under your control.  What is increase in property value derived from one additional dollar to net income?  Now multiply that times $50,000 or $100,000.


Cary, Raleigh, Apex, Fuquay, Morrisville, Holly Springs, Durham, Chapel Hill, Garner, Wake Forest. Residential rentals Wake County, RTP, RDU. Triangle area rental homes and property management.  Bev Roberts Rentals



Is Homeownership Attracting Less People?

home ribbonFewer people were applying for mortgages last week, and it appears even fewer are able to consider homeownership due to obstacles in putting together down payments.

The latest Mortgage Bankers Association’s Weekly Mortgage Applications Survey for the week ending Nov. 6 found the Market Composite Index had dropped 1.3 percent on a seasonally adjusted basis and two percent on an unadjusted basis from one week earlier. And while the seasonally adjusted Purchase Index squeaked up 0.1 percent from one week earlier, the unadjusted Purchase Index decreased three percent compared with the previous week–although it was 18 percent higher than the same week one year ago. The Refinance Index dropped two percent from the previous week, while the refinance share of mortgage activity increased to 59.8 percent of total applications from 59.7 percent the previous week.

The federal loan programs, on the whole, saw little serious movement. The FHA share of total applications increased to 14.1 percent from 13.2 percent the week prior, while the VA share of total applications decreased to 10.9 percent from 11.9 percent and USDA share of total applications remained unchanged at 0.7 percent.

But for many, the path to homeownership continued to be littered with financial potholes–especially in regard to downpayments. While new data released by Zillow reaffirmed the belief that homeownership is ultimately less expensive than renting, many renters are financially stymied in making the transition away from their current residential situation.

Zillow noted that while the majority of renters in the largest metros were able to set aside approximately 30 percent of their monthly income toward a rental payment–homeowners, on average, set aside 15 percent–trying to save money for a 10 or 20 percent downpayment was still tough.

“It’s not uncommon for a 20 percent downpayment on even a modest home to represent savings of $50,000 or more in some areas,” said Zillow Chief Economist Svenja Gudell. “And that number itself is a moving target, rising as home values escalate and harder to achieve as more money goes to landlords and less goes to savings. Using a smaller downpayment is an option, but often comes with the added cost of mortgage insurance. Knowing this, it’s no wonder that many current renters are waiting longer to buy a home and are turning to alternate sources, including friends and family, to help them scrape together a downpayment.”

Zillow’s data determined that rental affordability worsened in 28 of the 35 largest metros over the past year, while mortgage affordability worsened in only 18 metro areas. And while some markets are more affordable than others–a 20 percent down payment on the median home in Cleveland is $25,000–other markets offer higher entry obstacles–the 20 percent down payment on the median home in Boston is $76,220.


Increasing the Rent Amount on a Problem Tenant

AttorneyThe Landlord Protection Agency® presents John Reno, Esq., a highly experienced Landlord – Tenant attorney based on Long Island, NY.

Q: Dear Mr. Reno:
Rental increases. Is there a max I can increase my rent? Tenants have become a problem, and I have been instructed to go up on the rent in hopes that they move out. But just in case they don’t move out, I want to be sure I’m getting enough rent to cover their chronic complaining of nothing, and the constant of breaking of items they want new. Tenants are month to month. The option I was originally pursuing, was to give them a 30 day notice of termination of rental agreement, but was told it’s easier to just go up on the rent. Then It was noted that before I can go up on the rent, I still have to terminate the current rental agreement, then inform them that the rent will be increasing. I want to go up 200.00, but do not want it to be over any max amount, if one does exist for the state of RI. Your advise is greatly appreciated. Claire, Rhode Island

A: So prior to 12/1, you send a Notice certified mail that the rent is going up on 1/1/16 and a statement that if the tenants are not prepared to pay the increases, they should consider this a Notice to Vacate and vacate by that date or legal proceedings to retake possession will be brought. Whoever told you this is “easier” than just giving a 30 day notice, I disagree. This approach can be done, but you’re complicating this, so please dot all your i’s.

Rising Rents Impact Rental Affordability & Pose Challenges to Homeownership, Too

  • down-payment-increases2-36c55e-646x1024In the third quarter, home buyers could expect to spend 15 percent of their monthly income on a mortgage payment for a typical home, while renters could expect to spend 30 percent of their income renting a median-valued home.
  • Rental affordability is worse currently compared to historic norms in all but one of the 35 largest metros, making it difficult for renters to save money for a down payment.

Comparatively low monthly mortgage payments, coupled with increasingly expensive rents, continue to make homeownership a relative bargain to millennials and other potential home buyers. But there’s a catch.

Getting the best interest rate on a mortgage, and the low monthly payments that come with it, typically requires a down payment of tens of thousands of dollars in most areas, and hundreds of thousands of dollars in some. And coming up with that kind of cash is increasingly difficult as rents and home values alike continue to rise.

Nationwide, a home buyer making the national median income ($54,990) and purchasing the median-valued U.S. home ($182,500) during the third quarter could expect to pay around 15 percent of their income towards payments. On the flip side, if the same household chose to rent a typical home, they could expect to pay slightly more than 30 percent of its income towards median rent.

Of course, the 15 percent calculation assumes the buyer had the $36,500 on hand necessary to pay for a 20 percent down payment on the median U.S. home – a figure that varies dramatically from market-to-market depending on local home values. In many areas, a 20 percent down payment is a significant chunk of cash (figure 1).

In San Francisco and San Jose, among the priciest markets in the country, a 20 percent down payment on the median-valued local home represents more than $150,000, almost three times more than the typical U.S. household earns in a year and only about $30,000 less than the median U.S. home value. According to the New York Times, an annual income equal to the median 20 percent down payment required in the Bay Area would put a household into the top 8 percent of all household incomes nationwide.

Of course, smaller down payments are an option for many, but also often come with higher interest rates and private mortgage insurance (for down payments less than 15 percent), which both conspire to raise monthly payments and consume a larger share of monthly income.

What’s more, rising rents and fairly flat income growth are making it hard to save for a down payment in the first place. The share of income needed to afford median rents rose in 28 of the 35 largest U.S. metros over the past year. In other words, renters’ money that could be going into the piggy bank for a future down payment is instead going into landlords’ pockets.

As a result, first-time homebuyers and millennials, in particular, are left trying to find other ways to come up with a down payment in order to break into the housing market, often turning to friends and family for financial help. In 2014, 13 percent of home purchases were bought with help from a loan or gift from friends or family as part of the down payment.

A Moving Target

And on top of it all, down payment amounts themselves are a rapidly moving target – the amount needed for a healthy down payment keeps rising.

As recently as 2012, just after the national housing market bottomed out after the recession, a 20 percent down payment represented a lot less cash. For example, a 20 percent down payment for a median Bay Area home currently costs roughly $50,000 more than it did in Q3 2012 ($153,600 for a median home valued at $768,000 currently, vs $103,360 for a median home valued at $515,100 in 2012). Homeowners in San Diego and Los Angeles would need more than $20,000 in additional upfront cash in 2015 than they would have in 2012 to purchase the median-valued home in their area.

In Denver, one of the hottest markets in the country, buyers in 2015 needed an additional $18,620 compared to Q3 2012 in order to put 20 percent down on a median-valued Denver-area home. Put another way, that’s a more than 40 percent increase in the funds necessary to afford a 20 percent down payment in and around Denver. But over the same time period, Denver-area incomes grew just 13 percent.

A Wrench in the Works?

All in all, rising rents are making it harder for hopeful buyers to save for a new home, and as home values themselves rise, the amount of cash in the bank needed to buy a home is rising too. And a possible third wrench in the works is the potential for rising mortgage interest rates.

The Federal Reserve has been hinting at raising key interest rates for months, though luckily for buyers, rates have remained at historically low levels for most of the year. How much longer rates will stay low, however, remains to be seen. And when they rise, mortgage affordability will suffer – regardless of down payment (figure 2).


To calculate mortgage affordability, we first calculate the mortgage payment for the median-valued home in a metropolitan area by using the metro-level Zillow Home Value Index for a given quarter and the 30-year fixed mortgage interest rate during that time period, provided by the Freddie Mac Primary Mortgage Market Survey (based on a 20 percent down payment). Then, we consider what portion of the monthly median household income (U.S. Census) goes toward this monthly mortgage payment. Median household income is available with a lag. For quarters where median income is not available from the U.S. Census Bureau, we calculate future quarters of median household income by estimating it using the Bureau of Labor Statistics’ Employment Cost Index.

The affordability forecast is calculated similarly to the current affordability index but uses the one year Zillow Home Value Forecast instead of the current Zillow Home Value Index and a specified interest rate in lieu of PMMS. It also assumes a 20 percent down payment.

We calculate rent affordability similarly to mortgage affordability; however we use the Zillow Rent Index, which tracks the monthly median rent in particular geographical regions, to capture rental prices.

Assuming a 20 percent down payment on a 30-year, fixed-rate loan at prevailing rates, and only accounting for principal and interest payments.


12 “Sure” Deal Breakers When Screening a Prospective Tenant

Deal BreakersIf you are a discriminating landlord, you surely have a number of conditions on which you will disqualify a prospective tenant. As long as you discriminate legally, and not against any Fair Housing Laws, we may share the same “Deal Breakers” below. Some of these can go either way, depending on the needs of the landlord.

  1. Bankruptcy
    Do you know what a person has to go through before deciding to declare bankruptcy? It can sometimes be years of dodging creditors and bill collectors. It is a process that teaches an individual how to get around paying creditors. It is not a pleasant experience, and it usually educates and hardens a person towards all creditors. I don’t mean to say people who have gone bankrupt are not nice people or will not be good tenants! I mean to say that I prefer not to rent to people who are not afraid to damage their already damaged credit.
  2. Prior Eviction
    Any tenant who has been evicted probably has very bad credit and may feel confident in gaining a few months free rent in an eviction should the need arise.
  3. Criminal History
    I’ve been asked by a few landlords, “Am I allowed to discriminate against someone with a criminal history?” Of course you can! Yes, it is legal to decline an applicant because they have a criminal record. It may not be politically correct to decline criminals, but criminals are not a protected class…. Yet. Obviously, you need to use your common sense on this. A DUI or speeding ticket, for instance, doesn’t necessarily make someone a bad tenant, while a conviction for domestic violence could be more of a warning sign.
  4. No Money
    Are you a landlord who needs to collect the rent or are you a charity who takes in unfortunates who don’t have all the required move-in money? If you want to survive in the landlord business, you need tenants who can afford to move in and pay the rent every month. It is a major red flag when a prospect is unable to provide you with the necessary security deposit and rent. I am amazed at how many landlords allow tenants to move-in without first collecting the rent and a deposit!
  5. Bad Credit
    What is the purpose of running a credit report on a prospective tenant? You’d be surprised at how many landlords run credit reports that come up bad and still accept the applicant anyway. For me, bad credit history is a sure denial. Otherwise, why bother running a credit report? Needless to say, credit history is often indicative of how your rent will be paid.
  6. Tenant Unable or Unwilling to provide satisfactory references
    If they’re not willing or able to comply with your rental application, why in the world would you expect them to follow the rules of your lease?
  7. Tenant unwilling to agree with your lease
    That’s a no-brainer. DECLINED! I am surprised at how many landlords are willing to sacrifice important landlord protection lease clauses simply because the tenant wants them to. Of course, you need to to be sensitive to the tenant’s needs, and weigh certain arguments on a case by case basis.
  8. Bad Attitude
    That’s a no-brainer. DECLINED!
  9. Alcohol and/or Drug Problem
    I know you want to be fair and help people, but steer clear of these kinds of problems, especially when they are obvious. You are looking for a responsible tenant who you can rely on.
  10. Smoking
    This is a judgment call. I try to keep my properties smoke-free whenever possible. I find it is difficult to rent a unit to non-smokers that had smokers in it before. Rental re-prep involves a vacancy and is usually more painting and cleaning, and still may not eliminate the odor.
  11. Pets
    This is also a judgment call. I try to keep my properties pet-free. I learned that it can be difficult to rent after a pet was there, for allergy reasons, odors, etc. Rental re-prep usually includes more painting and cleaning and often new carpeting, and still may not eliminate all the odors. On occasion when I have great applicants and have inspected the previous home and the pet, I may make an exception, but I am still reminded of the immortal words of my landlord mentor, Nick Koon: “No dog ever improved the value of a rental property.
  12. Tenant Unable or Unwilling to see the rental personally or meet landlord before application being accepted
    Big red flag. Do a search of “Scams” in the LPA Landlord Q&A Forum. Even if the tenant is legit, you should not be deprived of the right to do a proper screening, including the opportunity to meet the prospect, so you can decide if you will be comfortable renting to him or her.

About the author:
As a Real Estate broker/investor in New York, John Nuzzolese has been involved with rentals and investment property since 1979. Besides owning and operating two real estate businesses, he is president and founder of The Landlord Protection Agency, Inc., an organization specializing in helping landlords and property managers avoid the hurdles and pitfalls and expensive blunders common when dealing with tenants.


Ask the Attorney: Tenant Vacated and Didn’t Pay Utilities.

AttorneyThe Landlord Protection Agency® presents John Reno, Esq., a highly experienced Landlord – Tenant attorney based on Long Island, NY.

Q: Dear Mr. Reno:
We recently found out that our former tenant moved out, and did not pay any of their utility bills. They have now left us with a bill of over 600.00+ dollars. We also found out they were withholding the copy of the bill in our name from the utility company. This copy was sent to their address, but they should have given it to us, as it said COPY, and was in our name. They also received their own bill, and knew they were required to pay utilities as part of the rental contract. This 600.00+ dollars will now fall back on our taxes since we own the home. Can you advise me in next steps for collecting this debt, or turning this is to a credit reporting bureau?? Thank YOU!

Kind Regards, Cheryl H.

A: STEP ONE: It’s a small claims case. You can file that on your own. Use the premises as their last known address if you don’t know the new one. STEP TWO: After you get your judgment- then it’s a collection case. That’s when you leave this eviction website and find a “collection” website.

8 Ways Real Estate Is Your Smartest Investment

Inflation is defined as, “a general increase in prices and fall in the for-sale-computer-hand-300x300purchasing value of money.” Your money doesn’t go as far – simple. The $30k you made at your job 10 years ago and lived comfortably with barely gets you by now. You can’t control inflation (the Federal Reserve does that) and the government has doubled their debt since 2008. It’s now at $18.3 trillion and grows every day.

The government cannot save you or your family, or ensure your financial freedom. Set your mind right about earning money. More cash = more freedom! Money itself won’t make you happy, but it will give you the ability to provide a better life for yourself and your loved ones. You must invest with income streams that give you positive cash flow, learn to leverage your debt, learn to handle inflation and take control of your physical assets.

Do you currently have commercial real estate assets in your investment portfolio? Are you scared to have your money in the stock market (like I am) but also fed up with almost no return on investment with your money at the bank? Do you instinctively like the idea of being invested in income producing real estate with results you can see?

Here are eight reasons why investing income producing real estate is an excellent choice for protecting and growing your wealth:

1. Positive cash flow.

One of the biggest benefits to income producing real estate investments is that leases generally secure the assets. This provides a regular income stream that is significantly higher than the typical stock dividend yields.

Related: 5 Lessons From Commercial-Real-Estate Financing for Entrepreneurs Seeking Funding

2. Using leverage to multiply asset value.

Another important characteristic of commercial real estate investing is the ability to place debt on the asset, which is several times the original equity. This allows you to buy more assets with less money and significantly multiply asset value and increase equity as the loans are paid down.

3. Low-cost debt leveraged to multiply cash flow.

Placing “positive leverage” on an asset allows for investors to effectively increase positive cash flow from operations by borrowing money at a lower cost than the property pays out. For example, if a property generating a 6 prcent cash-on-cash return were to have debt placed on it at 4 percent, the investors would be paid 6 percent on the equity portion and approximately 2 percent on the money borrowed, thereby leveraging debt.

4. Hedge on inflation.

For each dollar that is created, there is a corresponding liability. Real estate investments have historically shown the highest correlation to inflation when compared to other asset classes, such as the S&P 500, 10-year Treasury notes and corporate bonds.

As countries around the world continue to print money to spur economic growth, it is important to recognize the benefits of owning income producing real estate as a hedge against inflation. Generally speaking, when inflation occurs, the price of real estate, particularly multi-tenant assets that have a high ratio of labor and replacement costs, will also rise.

Related: How This Tech Startup Is Renovating the $12 Trillion Commercial Real-Estate Industry

5. Capitalize on the physical assets.

Income-producing real estate is one of the few investment classes that, as a hard asset, has meaningful value. The property’s land has value, as does the structure itself, and the income it produces has value to future investors. Income producing real estate investments do not have red and green days, as does the stock market.

 6. Maximizing tax benefits.

The US Tax Code benefits real estate owners in a number of ways, including unlimited mortgage interest deductions and depreciation accelerations that can shield a portion of the positive cash flow generated and paid out to investors. At the time of sale, IRS allows investors a 1031 provision, allowing investors to exchange into a like-kind instrument and defer all taxable gains into the future. (See your tax advisor for full explanation.)

7. Asset value appreciation.

Over time, more and more inflation has made it into the economy, drastically reducing purchasing power. However, income producing real estate investments have historically provided excellent appreciation in value that meet and exceed other investment types. Properties historically increase in value as the net operating income of the property improves through rent increases and more effective management of the asset.

8. Feeling the pride of ownership.

The right property in the right location with the right tenants and ownership mindset can produce a tremendous pride of ownership factor that is highest among all asset classes. Homeownership is out of reach for most people. Imagine owning thousands of multi-family housing units instead?

No one can ensure the future of rental of income properties’ values, but this asset class seems positioned to continue to benefit from many other socio-economic issues that I will save for another time.