How to deal with nosey neighbors

[Christian Hutchinson]

I bought a property in an affluent suburb of Metro Detroit recently. It was zoned for 2 units, it has been operationally 3 units for 18 years based on utility records (DTE Planning Department keeps extensive records).

I performed extensive cosmetic renovations on this property. House turned out pretty good.  The city, neighbors, seemed to leave us alone...Then we posted our home for rental.

Well, I assumed wrongly that 3-units means hey 3 families, and who cares. Esp since ALL the properties are 2 unit+ in this neighborhood

Well I was wrong...

I basically set a new market for the area, proving there is a place for "luxury" rentals. I raised the rents $500/month/per unit. Well as soon as I listed the property things got weird...

I would get calls asking "Hey is this Christian at (insert address), how many units you have available?" I would say "3", which one do you wish to see? They would say I want to see a unit.  I would say meet me in 30 minutes..no show, call the number back goes straight to voicemail.

I would receive phone calls asking if the property was for rent, I would say "yes" they would then hangup.

I would receive inquiries by email, again a simple reply of yes, and income requirements/move-in guidelines. The person wouldn't respond or say they were not interested.

I would get inquiries from Real Estate Agents by phone or email.  They would then not respond or if I did get them on the phone, they would say they don't want to see the property.

The real kicker was I would get calls saying "My parents are downsizing" or "my kid is moving back in town from out of state". I believe all leads are potential leads.  Then I would meet the people, and they would would start asking very probing questions "How many water meters are on this building? is it split at house or inside?" "How old is the furnace? How old is the hot water tank, isn't it (insert some newer technology)". Any single of these questions not a big deal,  but several people came through asking about infrastructure related setup of the property.

I would answer the questions and then after 1-2 days follow up and they would say "Oh we are waiting on a closing date, or transfer date".

So I figure I introduce myself to my neighbors, or talk to people walking down the street.  Tell them my name, give my contact information, let them know to call me if there are any problems.  Very eye-opening conversations:

General conversations I have had in the last month

"You buying that property is lowering my property values".

Another person said "You think you just come here and list rentals for all that money and people won't get upset? People see what you did online, tenants are asking questions".

3 people were ecstatic renovated the property because it was in disrepair, with broken windows, unsanitary living conditions inside. The previous owner refused to do maintenance, and subsequently only certain types of people would live in such conditions. Which greatly disrupted the neighborhood.

I was told I would let someone move into the property then "Their nephew would want to attend the local school system".

If I couldn't rent for the money I wanted I would rent "Section 8" to get more money, than the going market rate.

I had a complaint that by me fixing my property up, the City is now on their back about their's.

Then all of a sudden I started getting calls from the the local city, saying the house is zoned for 2 units and you have 3 units listed. I stated well there are 3 meters. They say they have no record of that which is non-sense because the meters are on the outside of the house. Its impossible not to know. Mind you I cross checked with the utility companies and service records for 3 separate units dates back since 2001.

I flatly asked the city and couple neighbors where was their concern for zoning, and quality of life when a house had numerous broken windows on the front of it, or when there was a city inspection performed the basement was so filthy and had so much debris the inspectors could enter the basement. And why didn't they remove the tenants from the property then? But now, everyone is worried about zoning, laws, code, etc.  I said why would I dump $100K into a house to then rent to "low-income" people in a census track with a median household income of $85K?

I pointed out "The previous owner behavedly badly for 20+ years, now you are coming after me when I'm fixing the problems". Why didn't you go after him.  No one at the City or neighbors can give straight answer.  They are hiding behind "code", once I bring this issue up.

The kicker is I see several properties with 3 meters, I know landlords have more units than zoned.

I also pointed out how is have 6 people living in 3 units more disruptive than 8 people (2 family of 4) living in 2 units? That was after someone said that I would have "20 people living in that house".

So in this rant...

Has anyone dealt with neighbors like this?

Has the neighbors than banded together to start a whisper campaign against you?

Then called the city to have them come after you?

Lastly, am I took close to this situation to think clearly? Am I in the wrong? I am considering retaining legal counsel to fight.  If this is about "code" then okay I am wrong.  But I clearly see that this rule has not been in enforced or equally enforced. So is it really a rule?

I see this issue as a bunch of neighbors who have ulterior motives, not about tenants.