All Forum Posts by: Ken Chud

@Ken Chud thanks for your thoughtful reply. I understand your concern-policies like the Tenant Opportunity to Purchase Act (TOPA) don’t directly tackle the immediate issue of tenant quality. The Act, signed into law in October 2023, is more about empowering renters by giving them a chance to buy their rental properties when the landlord decides to sell. It’s not intended to address tenant screening or defaulting issues, and I can see why it might not seem relevant to your concerns about tenant behavior and payment habits

To answer your question,I fully own a couple of companies and hold partial ownership in others with real estate portfolios totaling over $100 million in market value, but I try to keep an open mind and learn from both sides-whether it's through advocating for better tenant practices or working with property managers. You're spot on about security deposits being a practical tool to mitigate risk, especially with applicants who have checkered rental histories. Doubling up on deposits or requiring larger deposits might weed out some of the riskier tenants upfront, though it's not always a foolproof solution, especially in markets where affordable housing is tight.

Regarding your point about double security deposits, you're absolutely right-this can be an effective strategy. However, the Renters' Rights and Stabilization Act of 2024 now caps security deposits in Maryland at one month's rent in most cases, limiting landlords' ability to require higher deposits for higher-risk tenants​. This change makes it harder to use large deposits as a protective measure, which might explain part of the difficulty landlords are facing in managing tenant risk.

As for the post-COVID surge in applicants with problematic rental histories, many landlords across Baltimore have noted similar patterns. The pandemic disrupted rental payments and financial stability for many, even among those who are now back on housing assistance programs. I’ve seen landlords who handle this by requiring tenants to show commitment through actions like attending financial literacy programs before lease renewal, which could help mitigate some of the risks.

PS: If you haven’t already, consider working with local organizations that offer financial literacy workshops for tenants as part of lease conditions. It’s gaining traction in some areas as a proactive approach to stabilize tenant behavior and reduce defaults.

@Ken Chud, I totally get where you're coming from. Many landlords, especially those participating in Section 8 programs like the Baltimore Regional Housing Partnership (BRHP), have noted a decline in tenant quality over the last few years, particularly since COVID-19. The pandemic has created new challenges, not only for tenants but also for property owners managing housing programs. Background checks revealing failure-to-pays or past evictions have become more common, and you're not alone in seeing this trend in Baltimore County.

One major reason for the deterioration in tenant quality could be the backlog in processing housing assistance applications and increased financial strain caused by COVID-19. Some tenants are struggling to catch up on rent, which has been exacerbated by the expiration of federal eviction moratoriums and local rental assistance programs. According to data from the Housing Authority of Baltimore City, demand for vouchers remains high, and resources are stretched thin. The increased pressure on the housing market may mean landlords see a greater number of applicants with difficult rental histories.

However, all is not lost. Baltimore County has several landlord support programs to help manage this issue, such as the Landlord Leasing Incentive​(HABC). Additionally, you might want to consider working closely with your local Public Housing Authority (PHA) to screen applicants more thoroughly or negotiate higher payment standards for better tenant placements.

PS: Something that may help you: Baltimore recently passed the Tenant Opportunity to Purchase Act (TOPA), which aims to strengthen renters' rights and provide better engagement between landlords and tenants. This might create new opportunities for tenant stability down the road!​

 Yes, been BRRRRing in Baltimore County for years now. Currently at 19 sfr and still buying. Is there anything specific I can help you with?

Currently in the process of a BRRRR in Baltimore (duplex). Nice, safe neighborhood in 21215 area code. Contractors are working on it as we speak. Looking for advice on what I should do with the property. My original plan was to rent out the space to Section 8 tenants, but from my experience so far, dealing with Baltimore City housing and inspections can be a serious pill. My other options would be to Airbnb it (property close to Morgan State, JHH, and more) or rent it out to a regular or student tenant. Anyone with experience in Baltimore have any suggestions?

Cashflow depends on the Class of property.

Class A: rarely cashflows for first 3-5 years

Class B: should cashflow from day one or within 2 years

Class C: good cashflow from day one, should only increase

Class D: great cashflow from day one, but may fall over time

Ken,

In the SFR space I'm seeing lenders with 1.0 DSCR minimums, essentially just asking for them to not lose money, while most of the MFR (5+ specifically) are asking for a 1.2 or greater.