I'm exploring a form of arbitrage with a potential tenant who is looking to provide halfway/bridge housing to the formerly homeless. They take single tenants who have been approved for housing vouchers and need assistance getting out of the shelter system. In addition to providing housing, they connect residents to other social services they might need and work to get them to a point of self-sufficiency. They plan to have a live-in manager who would occupy the master suite, ensure tenant abide by the rules of the housing program (applying for jobs, observing curfew, etc). They're willing to pay a premium, prepay for several months if needed and self-manage the property, paying for all tenant-caused damage and general repairs up to an agreed-upon threshold. Currently they're using an LLC but are in the process of applying for 501 3c non-profit status.

My property is in Class C/D neighborhood, and up until now I've operated it as a by-the-room long term rental, and I house hacked this property before that. I struggle to find tenants that match traditional criteria that are willing to live there despite low rent and recent renovations. I like the idea of getting a premium while my property is used to help those in need and freeing myself from my current roles as property manager and referee.

This potential with this model intrigues me; My question for the community is: how could I structure a legal agreement that would protect me from the potential downsides of this kind of arrangement? Here's what I've thought of to ask for:

* Require a guarantor outside the LLC/business entity

* Require they list me a as a beneficiary on their liability insurance policies and provide proof that policies are maintained throughout the tenancy.

* Ask for 3-6 months prepaid rent upon executing the agreement with monthly rent to be applied to the next month not covered (If agreement starts in May, They'd pay for May/June/July and the rent paid in June would be applied to August, etc).

* Require individual tenants sign a liability waiver along with their lease

* Require a contract with a professional property management company, or that all maintenance work be completed by a licensed and bonded contractor.

* Include language that gives me final approval for any fixtures/appliances that need to be replaced over their tenancy.

Open to other ideas, but these all sound reasonable to ask for when renting to a business entity instead of an individual. Let me know what you think and if you have any other advice.

Columbus, Ohio

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