Helping tenants improve their financial literacy/stability

[Michael Ehmann]

Tl/dr: we are looking for advice/resources to help "train" our newly inherited tenants to be more financially literate/stable (more context below). 

Here is what we're looking for:

• Any programs/courses (either in Georgia or nationally) that help people become more financially literate.
• Recommendations for banks or other companies with low fees that might be beneficial.
• Any general advice/ideas on how to help/encourage our tenants to be more financially literate.

Some more context about the situation:

• My partners and I just acquired a rental property with tenants already in place. The tenants have been there for several years and want to continue to stay. As far as we know, there has not been an issue with collecting rent. 
• Our tenants are all minorities somewhere between ages 30 - 50. To every extend possible (without putting ourselves at risk), we would like to try and keep the tenants in place as part of the community. Many parts of Atlanta are experiencing gentrification and displacement of lower income individuals in the city. If possible, we do not want to exacerbate this (of course if issues arise, we aren't afraid to evict/do cash for keys, but we want to at least try to make it work first). 
• We do have some concerns about the financial literacy and stability of the tenants though. 
  • The previous owner collected rent each week, not monthly. 
  • We think the tenants have close to minimum wage jobs (or at least likely below median income). 
  • We are also unsure whether the tenants have bank accounts. Rents have previously been done via money order. 
• We aren't planning on changing too much on Day 1. However, we would like to move from collecting rent biweekly instead of weekly ASAP. And then long-term collecting monthly like normal. Even if it takes time to get to monthly rent payments, we also at least want to have a contract so that they're on a longer term lease (i.e. 6 months or 1 year), even if we still have to collect weekly for a little while.

Any thoughts are appreciated. Thanks!

[Marcia Maynard]

@Michael Ehmann  I commend you!  I have long held the belief that we as landlords have the opportunity to do good for humanity and good for our community.  Open and honest communication and mutual respect goes a long way. We have bought tenanted properties and always strive to save a tenancy, rather than force a move.

You've identified a key factor about low-income tenants. Often their position is a result of a lack of education and/or the desire to do what it takes to improve their situation. Many tenants lack an understanding about financial matters. Some lack the ability to read and write too. Most need someone to believe in them and provide guidance.  

Maintaining their sense of security and dignity is paramount. Transitioning from the previous landlord's rental agreement to yours may be a challenge for them, or may not be.  We start with introducing ourselves and our management style. We also let tenants know we will not be raising rents at this time and that tends to put them at ease. We open a dialogue whereby we can understand their current position and they can understand ours. Then we find common ground. If our values and their values align, then it works out. We share our mission statement with our new tenants..... "We strive to provide safe, clean, affordable, comfortable, and quiet housing for responsible renters." Everything we do centers around that.

Engagement is key. If the tenants understand WHY you are doing what you are doing, it will be easier for them to engage and grasp WHAT the goal is and HOW to get there.

If a tenant has a bank account, it can be beneficial for receiving, saving and managing money, as well as for paying rent and utilities. Wells Fargo offers "Opportunity Checking", a unique checking account designed to help people get a fresh start, even if they have made banking mistakes in the past. Other banks and credit unions may offer a similar product. I would check out those that are close in proximity to the rental unit and/or easily reached by public transportation.

I used to teach a class at the local Housing Authority called "Money Management Matters". In the class I introduced participants to a simple way to handle their income and expenses. The starting point was their current situation, building value for improving their situation, defining the direction they want to go, and asking "What would it take to get there?". Then providing the encouragement and resources to help them help themselves to do just that.