Guru talking about buy and hold, renting rooms to gov. agencies for handicapped at 3 X market rents?

[Kevin Romines]

I was listening to a podcast on REI club today about a guru, cant remember his name, but was touting a technique about renting SFR and multi-units by the room to gov. agencies for the handicapped at 3X the market rents?

He paid for all things, utilities, cable, garbage, water sewer, internet, maid service, lawn care.

Has anybody heard of this, or done it? I would like to know more, or determine if its all hype?

[Bill Gulley]

Kevin, I'd say 3X is hype for rents. Usually they are not government agencies but non-profits with govt. grants, subsidies and contracts.

Search "profits from non-profits" I believe, there is some discussion there. Also search "assisted living" another thread I believe.

I suppose you could have a county agency or state lease, but look to the non-profits that provide specific services for the disabled (if that's even politically correct now).

Another issue is zoning as a special use permit may be required, having special needs or more than 3 unrelated tenants is sometimes an issue.

You may also be subject to inspections and ADA requirements, hard surface floors wider doors, etc. it's no walk in the park.

After you get the permits and modify the place, you will get higher than market rents (due to mods) but you're also pretty well locked in to renting to that NP/agency, can't really take them to the cleaners as they can move on leaving you with a harder to rent dwelling too.
Insurance will be more and you better keep the place up in tip top shape. Here, such units are required to be sprinkled, fire systems too.

If someone is "selling" the idea, I'd say ignore it as you can find out what the deals would be in your area pretty easy with some phone calls. :)