Ethics Question !

[Benton Williams]

I am looking to buy a fixer upper. I’ve been seeing some options come through a wholesaler that are multi family and some are rented currently. 

I would aim @ renovating the property and increasing the rents. My girlfriend mentioned that it was sad if the current tenants wouldn’t be able to stay there. I thought it was a little sad too. 

What would your response be to justify the purchase and renovations? 

[Bruce Woodruff]

First, you need to stop listenng to your girlfriend, who has zero 'skin in the game'. But be polite.

Second, decide if you want to operate a business or a charity. Very simple question for yourself.

Third...wrap your head around the concept that others have mentioned....YOU are taking the risk here. Spending your (I assume) hard earned capital to invest in a place for others to live is a big deal. You need to set an expected ROI and set your rents to provide you that profit. As you may know, a good portion of your monthly rent will not go in your pocket, it will go to the constant maintenance, upkeep, repairs, taxes and the like.

Fourth, ask yourself... if you have a vacancy, the economy goes in the tank, you have huge unexpected repairs, etc....will your tenants chip in to help you out? WIll anyone...maybe the Govt? You know the answer.

Just be a good landlord - provide a nice, clean and safe place for people to live and charge accordingly. Simple stuff here....