Advice is there for renting a home in a low income neighborhood?

Question

I currently have a property in a low income neighborhood. My last tenant decided to move out early without paying off the rent, damage the place, and leave all of their unwanted items behind. I plan to keep this property, so does anyone have any advice for avoiding this again?

Colleen F. · Answer

@Jewel Coleman Screen! Set criteria for renters that keep problem renters out. 3 x rent , decent credit (criteria depends on your area), background check. Don't fall for sob stories. Pay attention to your instincts, If there are problems at showing often there are problems on renting. Know the laws in your area. If they are bad get them out right away. If you can't be tough with tenants interview and hire a good property manager.

Linda S. · Answer

@Jewel Coleman, As someone who does low income rentals, all I can say is welcome to the game. If you don't have thick skin, you will-- because people can TRASH, and I mean TRASH YOUR HOUSE BEYOND YOUR WILDEST DREAMS. How do stains and damage even happen where it gets so bad? Side note-- don't ever do a charity where they guarantee the rent for a year, learned the lesson the hard (and expensive!) way! That being said-- will everyone trash your place? Absolutely not! I've had some tenants leave the place better than when they moved in. I'd say from my experience, it's about 10% of the time it will be trashed, but that means 90% of it will be normal/wear and tear from good tenants. Don't let 1 bad apple make you think this is normal. If you can do M2M, absolutely only do M2M, it limits your losses, as if you see the place getting damaged-- you can immediately do a 30-day notice of nonrewal. No drama needed, no proving in court why-- it's simple. We've only had to do like like 3x in 6 years, but each time-- boy was that a lifesaver! It sucks feeling disrespected. Another thing--- do a discount if they pay by the 1st of the month. With some of ours, we offer $50 off if paid by the first, it's enough to help push people for a cheaper rate. Also-- minimize the items that can be damaged or that you're providing--- as an example-- microwaves, we prefer vent fans now, only provide the hookups, we're starting to get rid of TP holders, for whatever reason those always seem to be damaged. So be strategic, less people can damage-- the less you can possibly take off for the deposit, everyone is happy :) Think about what matters most to low income-- cheap rent, and figure out how you can provide that in a win-win scenario! If you're self-managing, I'd say the showings are the absolute most crucial thing, because it shows how the potential tenants are-- will they be nitpicky? Do they come across clean? Focus on screening-- job stability. Body language, communication, so much matters. Pay attention. If you're a good landlord, majority of people will appreciate you and try and be a good tenant.

Nathan Gesner · Answer

Low-income is tough. There are many that refuse to admit this but most people are low-income because they constantly make bad choices, which includes how they treat money, other people, and other people's property.You have to screen hard. You may need to take first, last, and deposit. You may need to charge a double deposit. More inspections. Stay on them like white on rice. Low-income can often generate better cashflow, but it takes a lot more work.

Scott M. · Answer

@Linda S. did a great job here, well done. I will add a few thoughts, not all apply to one group or another. You can visit their current property announced, or announced, doesn't matter. Have a document for them to review or sign and see how they keep their current place. After a showing walk them to their car and see how well the take care of their own property. Credit scores are 100% meaningless. You are lucky to find someone over 600. 500 are insanely common and 400's are not unheard of. Need to get in the habit of looking for what is making the score what it is. Look for housing related issues and care less about non housing related issues.Regular inspections are far more important. M2M so you can get them out. Do not waste 1 day on serving notices when they are late. You need to set hard boundaries about the upkeep of the home and rent. Clearly what I am saying here doesn't apply to all low income and it can apply to any income. Also understand a lot of slumlords prey on the low income. Low income tenants have a very different view of you as a landlord and don't think you will do much of anything to the home because of the slumlords. Treat them right and it can pay off.But the odds of getting burnt by tenants leaving and or trashing the place increase. That is the risk low income landlords take.

Nicole Heasley Beitenman · Answer

I second this. Keep emotions out of it--they either meet ALL criteria or they don't. A Google/social media search is never a bad idea either. And I'd give BP's book on land lording a read, too.

Quincy Lockett · Answer

@Jewel Coleman 1) Section 8 (to guarantee the income) & 2) Screen hard (credit, income, previous landlordS, social media, criminal background)Lower C & D class properties have the most unreliable cash flow if you don’t have efficient systems in place. The good part is that if you can be successful in this space, you can thrive in ANY property investment space. It’s like combat.

Colleen F. · Answer

@Jewel Coleman you are getting a fair number of comments now from people who have experience with this type of renter listen to them. I would second looking at what the payment pattern driving a credit score is. Medical collections are not of concern its not paying the essentials that are. I would also see if it is legal to put something in your lease about property left behind being considered abandoned and discardable. That will save you a headache for any renter.

Scott Mac · Answer

Hi Jewel, These are just some of my thoughts -- "off the cuff". This is "Par for the Course" in C and D. It seems like this is how many C and D people "Survive" sometimes. To help quell this, or make it "Less Likely" Screen your renters for past issues like this--but realize in C and D they sometimes let people live with them secretly--people who are more down on their luck than the renters are. Friends and family. Cousin just out of jail, Sister who spent the rent money on whatever and lost her apartment, etc... They also tend to have a lot of late night parties with visitors who may be the damage culprates. That is one end of the scale. There are also others who keep house like an Army Barracks. Windows clean, beds made, floors polished, nothing out of place. The leaving things behind issue--expect it, and follow your localities laws regarding what to do with it...store it for X days then toss it, or curb toss with deputies present, etc...Know the law and follow it. Look for a service to carry the stuff out of the unit so you can start the turn. Sometimes it will be disgusting rotten food, and worse. For the damage, take it out of their security deposit and if they are Section-8 report the damage to Section-8. For the missing rent money--can't get blood from a stone--try to find better renters--long term employed renters -- if you can. Good Luck!