Rental property landlords who want to be paid are often flexible regarding how they receive their rent money: checks, money orders, online payments, credit cards, and most recently -- mobile payment processes. But is accepting a nonstandard, science fiction-sounding currency called cryptocurrency -- namely Bitcoin (CRYPTO: BTC) -- taking flexible payment options a bit too far? Find out what one major developer (a California billionaire, of course) is doing regarding accepting bitcoin for rent.
Belief in bitcoin
The California billionaire mentioned above is Rick Caruso, owner of a commercial real estate company. Not only does Caruso's company accept bitcoin for rent, he believes in this new currency form so much so that he invests a portion of his earnings in bitcoin and has partnered with a cryptocurrency exchange called Gemini, owned by the famous Winklevoss (formerly of Facebook (NASDAQ: FB)) twins.
Caruso is not alone in his belief in bitcoin. PayPal (NASDAQ: PYPL) has invested in it. Elon Musk's company, Tesla (NASDAQ: TSLA), buys this cryptocurrency and allows customers to use it to pay for a Tesla vehicle. Payment service company Square (NYSE: SQ) buys bitcoin. Even huge Wall Street types Morgan Stanley (NYSE: MS) and Goldman Sachs (NYSE: GS) are at least acknowledging bitcoin: They're providing methods for clients to invest in it.
The IRS is legitimizing cryptocurrencies (to ensure it gets its share) and has added a section on Form 1040 to ask if taxpayers have had any financial interest in a virtual currency.
Will bitcoin be the 'it' currency for 2021?
As of March 2021, bitcoin is trading for nearly $60,000, leading many investors to believe, as Caruso does, that cryptocurrency will be part of society moving forward and play a role as early as this year. There are some big questions regarding bitcoin, though: Will it be part of our future? If so, will bitcoin be the currency selected?
Then there's Caruso's vision: an entire ecosystem designed around it, sort of in the same way the Model T car led to highways, gas stations, and even fast-food restaurants.
The vision: Imagine working for a company that pays you with a nontraditional currency, say pink painted rocks or bitcoin (the latter is better since you can use it on the blockchain). Either way, you'd then be limited on where you could spend those pink rocks or bitcoin.
But as luck would have it, your employer also owns apartments that allow payment in -- you guessed it -- bitcoin. You would then be spending your bitcoin on the very properties that issue your bitcoin paycheck. Your whole life would be a revolving "ecosystem" (Caruso's words) indebted to your employer.
The Millionacres bottom line
Taking bitcoin in rent payments today is extremely risky. Some people, such as economist Nouriel Roubini (known as "Dr. Doom"), think cryptocurrencies are a huge bubble waiting to burst.
Bitcoin may or may not be the currency of the future. And it's not surprising that Caruso accepts it as rent. He stands to make a lot of money if bitcoin makes it. Caruso is showing confidence in the product of which he invests.
If you believe in bitcoin, you might want to allow it as rent payment, too, but if you're risk-averse, it's probably better to wait on this one.