Have you ever rented to a person involved in a Family Independence Agency run by the state?

Question

In Michigan, we have a Family Dependence Agency which helps people in distress find suitable homes and jobs. They pay for the security deposit and first month's rent. Thereafter, the tenant must pay rent on their own.

I have concerns about working with one of these types of organizations because I'm not sure what the likelihood of paying rent will be once the renter is on their own.

Have you ever rented to someone involved in one of these types of programs? Did it result in a good tenant?

Any and all advice would be greatly appreciated!

Bradley Bogdan · Answer

@Hannah Williams,

I'm very familiar with programs in a few other places, though not Detroit specifically. From a strictly business perspective, most of the tenants utilizing those programs will give you issues in one shape or another. They draw from a considerably higher needs group than Section 8 does, on average. Also, since their services can be very time limited, there is always the issue of the tenant finding suitable employment, keeping said employment, the employer not jerking the tenant around (especially with low income workers, it goes both ways), etc. not to mention whatever other issues, be they family, substance use disorders, disabilities, etc. that could have contributed to them being in need of a high level of services. A long story short, a poor bet financially speaking.

Now, on the flip side, that doesn't mean that all folks in those programs are bad. On paper, none are going to look particularly attractive, but there are certainly success stories with these programs. Part of any business is being able to take pride in your work and membership in your community. That doesn't obligate you to take silly risks, but for many, it does mean making efforts to support and contribute to their community in ways that are not direct benefits to the bottom line. Whether participating in a program like this, and just being VERY selective about the tenants you accept, or contributing to your community in other ways fits your goals and your business best, that's up to you to decide. Even though I work as a Social Worker for my day job, I wouldn't chose those style programs as my way to contribute to the community, but other local landlords do. Hopefully someone here will have some larger scale numbers for you to help figure out how big of a financial risk a tenant like that could pose in your area, and that can help you decide whether its doable or not.

Either way, let us know what you chose and how it works out! Good luck!

Gilbert Dominguez · Answer

First I would say run your business as a business not a social program. Social programs are for those that can afford it. At best I would would go with section 8 that guaranteed most of your rent and sometimes 100% of rent. If you are in the business of renting then do everything you can to assure your rents. Once you have so many properties that one or two non paying tenants will not throw you off your game plan then you can try socialism because you can afford it.

It is not to be inhumane it is to protect your business.

Karen Bickford · Answer

@Hannah Williams  I did something similar with another govt agency that helps a certain protected class get on their feet.  They paid the security and tenent paid partial 1 months rent. That was all that was paid.

Said tenant was in my unit for 6 months before I was able to get him out. It cost me close to 10k in legal fees and cash for keys. Tenant was also professional and I was too stupid/tired to see through it

I wouldn't recommend this type of arrangement if you are in a decent rental market. No good deed goes unpunished .

Karen Bickford · Answer

@Hannah Williams I am sorry to hear this.  Hopefully there will be a swift resolution and  you got your life's lesson :)  no good deed goes unpunished unfortunately.

Hannah Williams · Answer

Thank you. You were all very helpful. Unfortunately, my property manager decided to sign a lease with these people without my go ahead, and they did become a problem. First, the payment from the state took 3 months to arrive. Then, the tenants made partial payments for a few months until they stopped paying all together. I'm very disappointed in my management company.

Have you ever rented to a person involved in a Family Independence Agency run by the state?

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