Renting to mental health for a group home

[Jorge R.]

Hey BP Community,

I have a rental available in a C class neighborhood and my property manager let me know that a mental health organization wants to submit an application.

The property is a 3 bedroom SFR and the organization intends on putting in 3 children to start between the ages of 11-17. The expectation is that each child goes through a three month rotation and then a new child would come in to the house when the previous departs. All the kids go to school daily and there is an adult staff member in the house 24 / 7.

Looking for any advice or things to consider before accepting this application.

Thanks!! 

[Nathan Gesner]

Have you checked zoning to verify this type of facility is allowed? You can expect complaints from the neighbors once they realize teenage kids are rotating through. You can also expect complaints of noise, trespassing, etc.

If the situation permits, I recommend only allowing it for a significantly higher price and additional requirements in place. For example, is the "adult staff member" licensed? Screened? Insured? Is the company insured with a minimum of $1 million? Are they licensed with the city and state? Will there be a security system or security cameras on the property?

I'm not familiar with your city but I've seen similar group homes pay up to 5x the standard rent and sign longer leases like 3-5 years. They can be charging up to $6,000 a month PER KID. That's $18,000 a month income and their costs are probably 1/3 that.