Has Anyone Made a Rental into a Group Home?

Question

My PM says her forte is managing group homes and has suggested that when my tenant's lease is up on a single family rental to convert the house (3 bed, 1 ba) into a 'group home'. It sounds a little like a house hack. Each tenant is supposed to be associated with a social worker. There's a full time staff member on the premises. This configuration would definitely increase the cash flow. The one big down side is that as the landlord I have to furnish the house. If anyone has any experience with this I would greatly appreciate your input.

Robert Flowers · Answer

Hi there!  I have been dealing with Special Needs for the last 10 years working with non-profit organizations and Special Needs.  Group homes are a good however, inspection can be intensive more so than Special Needs with mild disabilities. Mild disabilities, meaning. tenants are independent and can live productive lives. This can be considered as (battered females, Veterans, Homelessness etc.) No structural changes need to be made to your property for these individuals such as (wheel chair accessibility, ramps, sprinkling systems etc. Let's look at the benefits of using your property as is... For example: You have a 3 bedroom property and the market rent is 800 for your property. Your property have 3 beds that can be rented for the same 800 per bed from a Non-profit organization.. Let's do the math.. 800 rent x 3 beds = 2400 gross rental income that the property can produce monthly. In addition to that the Non-profit will pay you a deposit up to 2x the rent per person, 1600 deposit + 800 rent =2400 for that 1 person to move in..... This can be done for each room. With this type of setup, you would need the utilities in your name, and furnish the property.  It is well worth it. Setup can include bed, night stand, dresser and a tv in each room. Yes... a TV, the tv helps the tenant from getting bored and becoming psychosomatic that could lead to institutional living. Common areas would include stove, Refrigerator.  I hope this helps...