Tesla Accepts Payment in Bitcoin: Should Landlords Do the Same?

Tesla Accepts Payment in Bitcoin: Should Landlords Do the Same?

by The Motley Fool - Millionacres, Shaun Pappas Quoted

By: Marc Rapport

So, now Tesla (NASDAQ: TSLA) accepts payment in bitcoin. Now we know for sure the cryptocurrency is cool. But is it practical in more mundane transactions?

What got us thinking about this was a Reddit thread that begins, “If a tenant is offering to pay rent in bitcoin, would you accept it?”

The very first respondent gets to the heart of the matter: “I wouldn’t know how to.”

Neither would I. I also would be concerned about the volatility of the currency. I mean, I know the dollar changes in value against other currencies every day, all day long, but not like bitcoin, which on March 11, for example, was trading at more than $57,000 per each computer-mined “coin.”

So, unless your property rents in exact increments of $57,000, or whatever bitcoin is worth at that moment, how do you get a part of it? Do you cut it up like a pirate with a handful of pieces of eight?

Arrgh, with so much to know and cryptocurrency slowly but surely gaining broader use, we figured we’d asked someone who knows a lot about this stuff for a little insight.

In this case, it’s Shaun Pappas, a New York City real estate attorney who works with developers, lenders, and investors in the acquisition, sale, and financing of complex commercial, mixed-use, and luxury residential properties. His firm, Starr Associates, is currently working on more than 175 new construction and rental conversion buildings across 80 development firms around the Big Apple.

We asked him four questions:
What’s involved in accepting cryptocurrency for rent? Is it just bitcoin? Are there others?

Thus far, bitcoin has been traditionally the most often accepted cryptocurrency. Generally, the entity or individual accepting payments is receiving the funds in dollars through an exchange company, and there are several exchange companies that will convert bitcoin into dollars.

How do you convert those payments into cash? Will my bank or credit union accept them?

Although acceptance of bitcoin as a form of payment continues to evolve, at this point using an intermediary to convert the funds is the easiest method. The intermediary will accept the bitcoin payment and convert it to dollars for a percentage fee. The cash funds will then be transferred directly to the receiving landlord/owner’s bank.

Do you recommend converting it quickly into cash to avoid that price volatility?

The volatility of bitcoin raises the biggest question when accepting it as a form of payment. The renter/buyer can of course simply sell the bitcoin and convert to dollars on their own. However, in most transactions the third-party intermediary will make the exchange.

The receiving landlord/owner will prepare an invoice through the exchange, and the invoice is sent out over email to the renter/buyer. Typically, the person paying the notice in bitcoin will have 10 to 15 minutes to open the above and make the payment. The price is only locked for that amount of time to avoid volatility concerns. Once the payment is made through the intermediary, the cash exchange is sent to the receiving landlord/owner’s bank within 24 hours.

How widespread is that practice, and how much is it growing?
The practice is certainly becoming more widespread. In 2018 and 2019, we facilitated several apartment and commercial real estate sales in bitcoin on behalf of developers in New York City. Since that time, we have seen major companies shift toward accepting bitcoin payments, and we anticipate the real estate industry will follow.

The trend will continue to grow as the price of bitcoin increases and the ability to either purchase directly with bitcoin or exchange the currency becomes common practice. Many investors look at it as an opportunity to turn their bitcoin investment into a tangible asset in real property. Thus, we wanted to give our clients the opportunity to accept this as an additional type of payment.

The Millionacres bottom line
Because we’re here to help, and we’re all about real estate investing here at Millionacres, we commend for your edification this piece by our own Deidre Woollard: “Should You Invest in Real Estate with Bitcoin?” (Bitcoin was at a mere $23,000 or so when Deidre penned this piece way back in December 2020.)

And, as for actually working with the coin of the cyber realm, we also recommend that you check out this by Millionacres and Motley Fool writer Matt Frankel: “Best Cryptocurrency Exchanges and Apps for March 2021.

Matt notes that there are brokerage firms that handle cryptocurrencies as an investment, but it’s not for everyone.

That can be said of accepting bitcoin for rent payments, too. Not into it? Hold out as long as you can, I guess, but at least be assured that there are places that will turn it into “real” money for a fee. It’s not so different from the interchange fee charged by credit card processors in that regard. And as more people use cryptocurrency, maybe there’ll be competition for the conversion business that’ll help keep the fees down.



  • Arthur Stern
    Cogswell Realty

    Our team has had the pleasure of working with Starr Associates on our project at 150 Rivington Street.  The entire Starr team was a tremendous asset to the success of our project.   Through very challenging times, Starr Associates came through time and time again.  It is an honor to work with everyone at Starr!

  • Ian Schrager
    Ian Schrager Company

    I have known Allan Starr for many years and worked with him on many projects.  He has always exceeded my expectations.  He not only knows the ins and outs of the law, but knows how to make the whole process easy and quick.   I’ve found him to possess an incredibly astute legal mind, combined with a common sense approach that always accomplishes my goals.  He’s not only a gentleman and a friend, but a brilliant lawyer.


  • Emily Beare

    It has been an absolute pleasure working with Allan Starr and Samantha Sheeber over the past twelve years. They are not only the utmost professionals, but also wonderful people who I have grown to love like family. I trust them with all of my new development projects and private clients, and we support each other in our business and personal lives. Starr Associates LLP has always been there for me and my clients and I would recommend them as highly as I recommend anyone.

  • Andrew Berkman, Counsel
    Milstein Properties

    Allan and I have worked together for decades; along the way, I have worked with Samantha Sheeber, Andrea Roschelle, John Rodriguez and Erica Starr and have always been pleased with their quick and accurate responses. They have worked with us on closings (with great and efficient results), restatements of stale plans, amendments and other assorted AG requirements, always on a timely and cost-effective basis.

  • David Penick, Vice President

    “Working with Starr has been great on three condo projects in Manhattan to date.  The accessibility and direct attention of the partners is unsurpassed.  Allan and Sam have the interests of the owner at heart and make every effort to protect our interests in a responsible and defensible manner.  Their practical approach and deep knowledge of the offering plan process and requirements of the AG office combine to make a highly effective and efficient package.  At the associate level they have good support as well.  The closing office has to be the best in NY – never a failed closing in 15 years.  We are repeat customers and will be going forward.”

  • James Lansill, Senior Managing Director
    Corcoran Sunshine Marketing Group

    “Samantha Sheeber is a partner in making transactions successful. She’s resourceful, respected, smart, funny as hell, and is swift to constantly embarrass us (and clients) because she sees the end while we all muddle in the middle. She saves time. She is selfless and fast and conscientious. She’s loyal to the notion of selflessly getting stuff done. She cultivates great talent. And she makes the process fun, even when she is mad at us for asking the same impossible question 11 times hoping for a new result (a solution for which — by the way — she often discovers).”

  • Ben Shaoul
    President, Magnum Real Estate Group

    “As an active developer in New York City, Magnum Real Estate Group is proud to have partnered with Starr Associates, LLP as our legal counsel in 5 significant projects valued at approximately $800 million.  Over the last 5 years, Starr has provided us with exceptional advice on condominium Offering Plans and related transactions. Partner Samantha Sheeber, Esq. and her team have professionally guided us, and provided creative and effective solutions when needed.”

  • Susan DeFranca, President & CEO
    Douglas Elliman Development Marketing

    “I have had the fortunate opportunity, over the past 16 years, to work with Allan Starr and Samantha Sheeber who I consider to be experts in the field of real estate law.  They, together with their team, have a deep understanding of Attorney General Offering Plan registrations and continually seek to identify creative solutions to complicated issues.  Their level of integrity and commitment are unwavering no matter how large or small a project. I completely endorse Starr Associates LLP and look forward to our mutual continued success.”

  • Michael Rudder
    Rudder Property Group

    “Starr Associates’ specialty in the creation and representation of condominiums is unmatched. Their knowledge, experience and professionalism in the office condominium sector is best-in-class. Starr Associates’ hard work and expertise has been critical to the success of our firm’s office condominium projects.”

  • Charles Bendit
    Co-CEO Taconic Investment Partners LLC

    “Starr Associates have been our condominium attorneys for many years. Their counsel goes well beyond just drafting the condominium documents, which of course they do extremely well. They also represent us and our brand with condominium unit purchasers, and with our lenders and partners on condominium related matters. We have always found Starr’s attorneys to be professional, responsive and cost-conscious.”