Any advice on renting to the Chronically Homeless

General Landlording & Rental Properties
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Any advice on renting to the Chronically Homeless

Wendy Lavana
Rental Property Investor · Miami/Jacksonville Fl · Member since 2014 · 75 posts · 41 votes

Our city has a new program that is assisting 22 people individuals. They will pay first, last and security plus monthly rent and the tenants utilities. I have been having trouble renting out the units. They like our units, however, I'm worried about having individuals with mental behavioral problems and possible drug addictions. The program is aimed at helping the Chronically homeless by providing them a place to live. Basically the city wants them off the street. I'm worried this would cause the neighborhood to spiral downward. Any advice? 

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James Wise
Real Estate Broker · Cleveland Dayton Cincinnati Toledo Columbus & Akron, OH · Member since 2013 · 30k+ posts · 20k+ votes
10y

Guranteed rent is nice but looks like a lot of headaches I wouldn't want in my buildings.

I would pass then lower rents on my empty units to get them filled.

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  • James Wise
    Real Estate Broker · Cleveland Dayton Cincinnati Toledo Columbus & Akron, OH · Member since 2013 · 30k+ posts · 20k+ votes
    10y

    Guranteed rent is nice but looks like a lot of headaches I wouldn't want in my buildings.

    I would pass then lower rents on my empty units to get them filled.

    1Reply
  • Joseph BricklerPro Member
    Investor · Cincinnati, OH · Member since 2011 · 13 posts · 2 votes
    10y

    We have rented to the homeless agencies The money is good, but many of them are in fact homeless for a good reason.  In fact we just caught one inviting a known heroin addict into his apartment. When she leaved she looked like she just came down off of a high. We wrote the man up for illegal drug usage in his apartment.  We have been very strict on our rules about how many vistors also.  He wanted to share his place with a dozen of his buddies and seen nothing wrong with that.

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  • M Marie M.
    Rental Property Investor · Washington, DC · Member since 2015 · 278 posts · 156 votes
    10y

    @Wendy Lavana is the city agency handling this also providing other wrap around services? Without those that's just trouble and the whomever is sponsoring the program didn't think things through. 

    Regarding the neighborhood, one person with problems, does not bring down a whole neighborhood. Maybe a block, if they try really hard. Many nice neighborhoods have that 1 hoarder, and many nice families struggle with addicted family members in their house. We have a men's shelter in our neighborhood run by Catholic Charities that keeps a super-low profile, and it hasn't stopped the sale of near 1 million dollar houses. And the soup kitchen famous people like to go to to show "hey look I'm doing charity stuff" has only slowed down the ever increasing prices. 

    Also how hard is it to evict someone if they do become a quality of life problem for your other tenants or start destroying stuff inside the unit or becomes a hoarder? In DC a similar program was talked about but DC is very, very tenant friendly/landlord hostile, so as far as I know it went nowhere fast.

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  • George P.
    Property Manager · Livonia, MI · Member since 2011 · 4k+ posts · 1k+ votes
    10y

    hell no.

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  • Mindy JensenPro Member
    BiggerPockets Money Podcast Host · Longmont, CO · Member since 2014 · 7k+ posts · 10k+ votes
    10y

    We interviewed Michele & Bruce Fischer on Podcast 79 about low income landlording. Their tenants are one step from homelessness, and they have to overcome some challenges to make it work. 

    How does this fit in with your other tenants? Do you own the whole building and some tenants have qualified through their jobs? They may not appreciate your renting to people who did not have to qualify the same way they did. 

    [email protected]Podcast Guest on Show #261
    BiggerPockets
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  • Justin R.
    Developer · San Diego, CA · Member since 2015 · 1k+ posts · 1k+ votes
    10y
    I would (and do) consider this sort of thing for a minority of our units - if the likelihood of having to deal with additional tenant problems is high, I don't mind taking that risk in limited quantities. Have you asked the city how the program would help you deal with any potential behavior headaches? Section 8, for example, has some protocols to make it more attractive to landlords.
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  • Brian Roces
    New York City, NY · Member since 2014 · 14 posts · 2 votes
    10y

    I work with a group in Rochester who places veteran addicts and another program for women. These programs there are caseworkers to help the tenant and they act as an intermediary. I also have section 8 tenants and by far the program tenants are better than the section 8. The program pays 100% where section 8 there is still the tenant portion and then in some cases I have to pay electric. In another state for section 8 I have to pay for water.

    I'll go with that program any day and hopefully the next property I have will be filled with the program tenants.  

    1Reply
  • Steve Vaughan
    Rental Property Investor · East Wenatchee, WA · Member since 2014 · 10k+ posts · 16k+ votes
    10y

    As a compassionate (sucker?) landlord, I have placed many a second-chancer.   I no longer do substance abuse recovery people.  At least not without a decade of recovery under their belt. Habitual relapsers are too much for me to keep the trash away.  The heroin addict visitor like @Joseph Brickler mentions is a problem with no real solution and conducting 'illegal activity' is difficult to prove.

    I have found them to need some basic education.  No, it's not ok to hang your ratty blanket in the window.  We have blinds here.  It is not okay to leave a bundle of belongings (your crap) out front.  We like to keep things tidy.  Basic stuff they're not used to. Without substance abuses though, it seems to be going ok when the property and neighborhood are a fit for second-chance granting. 

    Helping the community is a noble cause and I believe can be beneficial to us as well in the right circumstances.   Without a higher purpose I would've given up a long time ago!

    1Reply
  • Linda WeygantPro Member
    Investor and CPA · Arvada, CO · Member since 2015 · 2k+ posts · 3k+ votes
    10y

    This is one of many articles that have been circulating the last year or so:

    Housing the homeless is cheaper

    I think being part of that solution would be great.  However, here in Denver, we're going the opposite direction:


    Denver Tiny Houses for the Homeless Destroyed - 10 Arrested

    Podcast Guest on Show #244
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