Doing some good as investors? Examples of social or green actions

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Doing some good as investors? Examples of social or green actions

Bend, OR · Member since 2013 · 29 posts · 13 votes

I love real estate and I love making money with it, but every now and I start wondering if there is something more I should do... I do believe that just by being a reasonable landlord we can make a bit of a difference already, but I'd love to hear some stories about other ways we can contribute to society. What have you done that you think has made the world a slightly better place? Offered to forgive rent payments while someone was in the hospital and couldn't work? Reduce the rent for a family in need? Or something more creative?

The same goes for the environment: what about building green? Installing solar panels even if the math doesn't support it? Any examples of green action?

And how to go about it? Do you give yourself a budget for 'positive actions' (social or green)? Or do you have an income goal after which you would start considering such actions?

Please share any stories and thoughts! Thank you!

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Real Estate Agent · Highland, UT · Member since 2015 · 407 posts · 272 votes

A project that I want to do but have no idea how to do it and make money or at least break even. I want to build or buy a large apartment complex where rent can be very affordable but have a nice place. Then every month have classes on how to break the poverty mindset and improve your life. I hate seeing low income being taken advantage of because they've never been taught how to live a better life. I guess I could do classes without the rental but I figure having the rentals would give me access to these type of people when they apply and move in if rents are low enough.

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Curt DavisBusiness Member
Flipper/Rehabber · Memphis, TN · Member since 2008 · 5k+ posts · 2k+ votes
10y
A company I worked for several years back go involved with a company that was selling carbon credits. The idea was every time we sold a home to an investor we would ask them to donate $250 to this company and then they were supposed to plant a tree somewhere. It sounded like a good thing but in all reality I think this type of thing is a huge scam.
I love the idea of solar panels but considering the tenants pay the utilities I dont see how it makes financial sense for the owner. I wish things like this were more affordable.
My only issue with showing sympathy in the form of anything relating to the rent is once you do that you might be taken advantage of more often as they see your a softie.
Not trying to sound like I dont have a heart but I have been doing this too long.
Great post!!
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Carolyn Morales
Investor · Jacksonville, FL · Member since 2015 · 504 posts · 217 votes
10y
Probaly paying it forward and teaching young people to invest and setting a frugal smart example is a positive action. However, when an owner financed older couple could not balloon pay me off after 4 years, I ammended and extended the contract 8 years and took 7 k off the balance after the well collapsed and also loaned them $3500 on the back end to diy tin the roof. This was 4 years into owner financed contract..But, forgiving rent mindset with rental tenants has only sank me in the past. Ive seen tenants cry broke sick but not do without mani pedis. More often than not we have had good tenants though.
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Becca Summers
Real Estate Agent · Highland, UT · Member since 2015 · 407 posts · 272 votes
10y
A project that I want to do but have no idea how to do it and make money or at least break even. I want to build or buy a large apartment complex where rent can be very affordable but have a nice place. Then every month have classes on how to break the poverty mindset and improve your life. I hate seeing low income being taken advantage of because they've never been taught how to live a better life. I guess I could do classes without the rental but I figure having the rentals would give me access to these type of people when they apply and move in if rents are low enough.
2 Reply
Jeremy T.
Real Estate Investor · Philadelphia, PA · Member since 2014 · 45 posts · 30 votes
10y
@Linda B. when my business partners @David Ross and @Troy Sheets first sat down we wrote a 1-page strategy document for where we wanted to be in the next 1 year, 3 years, and 5 years. For each phase of our plan we included the following:
- expected ROI
- Cash involvement
- Target leverage ratio
- Pre-tax earnings
- Community reinvestment
Contributing to the community where we invest is integral to our success. Troy posted in an earlier thread our discounted rent program for an employee at a local NGO. I agree with @Carolyn Morales that we have to be smart about how we give back; if we give away for free we're likely to get walked all over, so instead we discount the rent by around 25% below the low end of market rental rates in this instance.
Similar to what @Curt Davis is describing we also target all of our projects to be energy and eco friendly. In a flip we did in Philadelphia we probably paid an extra 8k just to upgrade the HVAC to ductless split minis that offer a lower carbon footprint. This same project, and how we spec out all our flips and our new construction projects target the same eco friendly design with features like tankless hot water heaters, energy start appliances and upgraded insulation. I'm not sure if we are going to pay for LEED certification but our projects target Energy Star standards.
Another idea I have been tossing around is the idea of offering a 10% rebate (or fixed dollar payment, e.g. $20/month) to tenants who subscribe to a wind/solar/renewable resource energy supplier. A larger new construction buy & hold rental project we are specing out may go all electric to reduce the lead time for having the gas company setup the lines, permitting etc. and this would make adopting the renewable energy credit program more feasible.
Many of these projects offer state, local and federal tax credits and we have to get smarter about those programs. In the meantime, what we are thinking about and doing just makes sense from a marketing, total cost of ownership, and simply 'right thing to do' perspective. We're probably not winning awards for the cheapest fastest build but I'd like to think we're having a good time and whatever, most of the time we usually come out ahead.
Good luck and looking forward to other people's ideas!
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Carolyn Morales
Investor · Jacksonville, FL · Member since 2015 · 504 posts · 217 votes
10y
Oh I forgot. And this next example could be self serving. I offer a $50 discount to tenants who pay a day early by direct deposit. I could get more for my 1684 sq ft condo in a gated community but this strategy has worked very well. I havent had to advertise in several years. People want to stay and when they move the next tenant is waiting by word of mouth
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Tanya F.
Rental Property Investor · Madison, WI · Member since 2013 · 629 posts · 339 votes
10y
Love this thread! There are so many ways to make green or other improvements for the community! We try to do something like this on all of our rentals. Upgrading insulation and providing garden space have been the things that our tenants like best.
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Michele FischerPro Member
Rental Property Investor · Seattle, WA · Member since 2013 · 2k+ posts · 1k+ votes
10y
We had a tenant who lost her job so we gave her 2 weeks free rent because she had been a good tenant and was communicating with us. In general I like to keep my charity separate from my real estate. My husband often argues to blur those lines.
I started an adopt-a-block program in the neighborhood we invest in, but we adopted a block where we do not own any rentals. We go door to door to deliver community newsletters, make detector batteries, surplus food (we have access to eggs and produce). We host a block party and have dump runs and alley clean-ups. It doesn't take a lot of time and I think it helps the neighborhood, the sense of community, and the single people that don't get a lot of social interaction.
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Jay HinrichsBusiness Member
Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
10y
@Linda B. well I am a confessed worlds worst landlord.. last winter my tenant in kokomo said they could not afford the heat since it was super cold ( I knew that as well it was brutually cold) so I said no problem don't pay rent for 2 months then just continue.. well they did not pay for 2 months and then moved out.. kind of spit in your face type of charity.
As for Green I would suspect there in not one member of the 350,000 BP members that has planted more tree's than me. @Curt Davis talks of 250 to plant a tree that is funny. I logged in the NW for 11 years. and replanted on average 300 trees to the acre and logged well over 4,000 acres a year. so at 250 a tree that would have been a cool 1 mil a year .. when in fact we spent about a 10th of that about 100k a year replanting 120,000 plus a year... I look at stands I clear cut in 1992 and the timber is now 25 foot tall and growing strong makes me a proud logger...
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Linda B.
OP
Bend, OR · Member since 2013 · 29 posts · 13 votes
10y
Thank you everyone, these are exactly the kinds of posts I had hoped for! Very inspiring.
And some good points raised about finding the right balance between being 'too soft' and getting taken advantage of and still doing some good...
Exciting, thank you!
1 Reply
Max T.
Investor · Philadelphia, PA · Member since 2015 · 3k+ posts · 3k+ votes
10y
The local water department offers storm water management tools for free or reduced cost. I get rain barrels installed at the rentals. Costs me nothing and cuts down on the water bills a bit. Also helps the local rivers by cutting down on the amount of water that flows into storm drains, reducing the overflow that would go into the rivers.
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Eli Winkelman
Portland, OR · Member since 2016 · 29 posts · 10 votes
10y
If you're in Oregon I'd look at solar power. It's one of the better states for it (a lot of this is because of the Renewable Energy Portfolio Standards, Energy Trust Rebates, etc.). Apparently a 7 year payback for a 5kw system (according to solarpowerrocks.com), this changes yearly and a big solar bill just got passed in Oregon. You can include electricity in the rent or lease the panels to tenants, but it now falls in the category of great environmental thing to do, and the math works out, as long as you can find a way to sell the energy, which is what my startup is trying to create a system for. We're in Portland, OR, and we're trying to start a pilot program with 20 or so people, let me know if you're interested in talking or have any questions about solar energy for rental properties, I can answer most questions about it.
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Steve B.
Engineer · Portland, OR · Member since 2014 · 1k+ posts · 1k+ votes
10y
Whenever I evict a tenant I give them recycled trash bags to put their possessions in.
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Jay HinrichsBusiness Member
Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
10y
@Steve B. Best post of 2016 so far.... Love it !!!
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Thomas S.
Member since 2016 · 13k+ posts · 12k+ votes
10y
I am not into green or the environment seems to me to be a waste of time. Usually costs more and does not give a descent return but what I have done for some of my tenants is offer them low interest personal loans for house hold items (TVs furniture etc.) Many can not get unsecured lines of credit below 10% so I offer 7-8%. Obviously these are only my most trusted long term tenants.
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Eli Winkelman
Portland, OR · Member since 2016 · 29 posts · 10 votes
10y
The credit line is actually a good idea, keeps tenants from having to get high interest loans. I wouldn't say that green doesn't give a decent return, at least for solar, in many areas of the U.S., if you run the numbers you can get better than stock market returns, for something that doesn't have as much risk. In Hawaii and Massachusetts the IRR for a 5kw residential solar system are over 30%. It works out pretty well in Oregon as well, here's a breakdown of the cost and IRR before and after all the incentives https://solarlandlord.wordpress.com/2016/04/05/the-cost-of-solar-in-oregon/. I'm not sure how it works out in Toronto though, totally different tax incentives.
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