Author Topic: Compassionate landlording  (Read 4204 times)

LaineyAZ

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Compassionate landlording
« on: May 10, 2019, 08:12:02 AM »
A question for the future:
I have a tiny 1/1 single family home in downtown Phx AZ.  No mortgage.  Property has nice front and back yards with irrigation, mature landscaping, and lots of space for parking.  Have an elderly relative in there now paying the "family discount" rent.

My question is that after this relative passes away, I'd like to rent it to an individual or small family who could use a break financially but would otherwise be good renters.  I know that may be asking for the impossible, but I don't need or want to squeeze every dollar out of this property.  I have a lot of interest in affordable housing and since I'll be in a position someday to provide that, I'd like to help someone out. 
How would I go about finding some renters who are truly in need and avoid scammers who just want cheap rent?  or is this just a pipe dream?

Another Reader

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Re: Compassionate landlording
« Reply #1 on: May 10, 2019, 09:20:56 AM »
Pipe dream.

The process of selecting renters is so difficult now because of discrimination issues that you would not be able to say no to people that you don't want that do meet your income criteria.  Section 8 will NOT get you what you want, especially in the City of Phoenix.  Not renting to higher income people might be interpreted as another form of discrimination in an open market listing.

Your best bet is either to find someone via word of mouth or to rent it out at market and donate a portion of your proceeds to a group that is effective in finding housing for these people.

When I do get a good tenant that is struggling financially, I will back off on rent increases.  I have one situation now with a long term tenant whose spouse has cancer and can't work.  Not raising their rent.

rothwem

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Re: Compassionate landlording
« Reply #2 on: May 10, 2019, 09:29:50 AM »
Pipe dream.

Yep.  Trying to be compassionate in the landlording business is a good way to get really screwed.  Sell the place and donate the profits, at least you'll be giving the money away on your terms instead of spending it cleaning up some lowlife's mess. 

iris lily

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Re: Compassionate landlording
« Reply #3 on: May 10, 2019, 09:36:13 AM »
Pipe dream.

Yep.  Trying to be compassionate in the landlording business is a good way to get really screwed.  Sell the place and donate the profits, at least you'll be giving the money away on your terms instead of spending it cleaning up some lowlife's mess.

It is probably a casita on her property. 

Love those places! We rented one thri Air bnb on a vacation where we took our dog who barks. Couldnt leave him in a motel room, too hot to keep him the car.

iris lily

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Re: Compassionate landlording
« Reply #4 on: May 10, 2019, 09:37:07 AM »
OP, I bet you can find it kind of tenant you want by working with local churches or nonprofits who work with transitioning people to their own place. Placing notices on the open rental market is not the way to go.

couponvan

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Re: Compassionate landlording
« Reply #5 on: May 10, 2019, 09:37:33 AM »
Word of mouth is probably the best way.  My parents had lots of single mothers with welfare as their tenants....but they always got their names from church.  Every one of them was a good long-term tenant.  Sadly all of their kids (daughters) have turned out like their mothers - sweet, but young single mothers on welfare.  It has been a huge mental disappointment to me that these girls haven't broken out of the mold.

iris lily

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Re: Compassionate landlording
« Reply #6 on: May 10, 2019, 09:44:32 AM »
Word of mouth is probably the best way.  My parents had lots of single mothers with welfare as their tenants....but they always got their names from church.  Every one of them was a good long-term tenant.  Sadly all of their kids (daughters) have turned out like their mothers - sweet, but young single mothers on welfare.  It has been a huge mental disappointment to me that these girls haven't broken out of the mold.

I found the book Promises I Can Keep, an academic study of single mothers, to be a fascinating glimpse into the  life of purposely choosing unmarried motherhood and government subsistence.They have their own reasons, logical within the framework of the culture of poverty.

waltworks

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Re: Compassionate landlording
« Reply #7 on: May 10, 2019, 09:52:54 AM »
Go to any local elementary school, get buzzed into the front office, and talk to the front office person/secretary about your place. The school will almost certainly have teachers (some single parents) who are barely scraping by and doing a very important job.

When our current tenants get married and move out of our basement apartment, this is what we'll do.

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PMG

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Re: Compassionate landlording
« Reply #8 on: May 10, 2019, 10:31:46 AM »
I hope you're able to find someone!  I might not have the right words, and I really know little about landlording, but I wouldn't really talk about it as a charity, or even that your looking for someone at risk.  Framing it that way seems like it would create more risk for you!  I could see someone abusing your generosity.  But targeting where you advertise the opening (at a school, like someone suggested) might lead the right person your looking for to you.  You still want to be doing background checks, credit checks, getting thorough info. What you really want is someone who will be a good renter.  Responsible with your property.  Someone who will communicate. Ask for income info on your application.  When you interview you can likely spot who fits what you're looking for and give them priority.  You can give them a boost in life without explicitly telling them that's what you are doing.  Word of mouth, a friend of a friend, might be the best way to find someone, but I would still approach it in a business like manner.

I was really low income while in school, and long time friends rented to me for a "friends and family" rate.  If they had told me it was charity I would have avoided the whole situation.  I would have been concerned about there being strings attached to the deal and never really been comfortable with it.
« Last Edit: May 10, 2019, 10:36:46 AM by PMG »

Another Reader

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Re: Compassionate landlording
« Reply #9 on: May 10, 2019, 11:14:49 AM »
OP, I bet you can find it kind of tenant you want by working with local churches or nonprofits who work with transitioning people to their own place. Placing notices on the open rental market is not the way to go.

And those same people might file a fair housing complaint if you don't rent to who they send you.  If you do rent to one of their applicants and have to evict, they may testify for the tenant and pay the tenant's lawyer.  If you insist on doing this, word of mouth and applying the same screening criteria you would use on any other applicant would be the path I would take.

Cassie

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Re: Compassionate landlording
« Reply #10 on: May 10, 2019, 11:23:13 AM »
I have known single moms that have gone from welfare to college to work. They have successful careers and there kids have turned out well. 

iris lily

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Re: Compassionate landlording
« Reply #11 on: May 10, 2019, 12:05:31 PM »
OP, I bet you can find it kind of tenant you want by working with local churches or nonprofits who work with transitioning people to their own place. Placing notices on the open rental market is not the way to go.

And those same people might file a fair housing complaint if you don't rent to who they send you.  If you do rent to one of their applicants and have to evict, they may testify for the tenant and pay the tenant's lawyer.  If you insist on doing this, word of mouth and applying the same screening criteria you would use on any other applicant would be the path I would take.

Ah! No good deed goes unpunished.

Jon Bon

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Re: Compassionate landlording
« Reply #12 on: May 10, 2019, 12:35:16 PM »
Just charge market rent and donate the difference. Probably will do more good, but might not feel as good.


FINate

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Re: Compassionate landlording
« Reply #13 on: May 10, 2019, 02:03:15 PM »
Good for you!

We've done something sorta similar over the years with spare bedrooms and vacant rental units, letting people stay for a time rent-free as guests. A few things I've learned over the years:

1) A fixed time period is better than open-ended. Find folks by word of mouth who are experiencing a temporary rough patch, maybe a recent job loss or urgent need to find new housing. There's a gap in the social safety net because it takes time to get plugged into programs, and you can fill that gap. If they cannot sustain themselves long-term then they need to get on Section 8 and/or make some other big changes. Otherwise, over a long period of time they'll become dependant on your generosity which inevitably creates resentment on both sides, and it also creates housing insecurity because they depend on you instead of being self-sufficient. IMO, 6 months max, which should be enough time to find employment and save up enough for a first/last along with a bit of a buffer.

2) No drugs or alcohol. Again, you can mostly find this out by word of mouth. Unless you are trained and equipped to deal with addiction just accept that it's a monster that you cannot deal with on your own. So limit it to those who are clean and sober. I don't have anything against alcohol, per se, but if someone's at the point where they need charity then they shouldn't be wasting money on alcohol. Especially since it can become an issue if then end up using it as a mental escape.

3) Other house rules: Hours of coming/going (esp. if you share an entrance/driveway), expectations for cleanliness and upkeep, visitors, and so on.

4) Long-term plan for sustainability.

I cannot stress this enough: Communicate expectations up front and as clearly as possible, and be diligent about holding the line throughout.

Finally, understand and accept the risk that comes along with the territory. We had one person who was a problem -- hard on the property and difficult to get rid of, and then we had to spend some money to clean and fix the place. But in other instances people got back on their feet and are now thriving.


LaineyAZ

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Re: Compassionate landlording
« Reply #14 on: May 10, 2019, 08:07:42 PM »
Thank you all. 
This is a tiny home on its own property; I live 12 miles away in my own home.   

I was under the impression that as a "one door" landlord (i.e. I do not have multiple apartments or houses) that I was not subject to the discrimination laws - perhaps that was naÔve, I'll have to check on that.  Of course, I was not planning to discriminate in the first place but I realize now it's best to know up front. 

In any case, it does seem like making some discreet inquiries and not openly advertising is the best way to go.
« Last Edit: May 10, 2019, 08:29:38 PM by LaineyAZ »

elaine amj

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Re: Compassionate landlording
« Reply #15 on: May 10, 2019, 08:53:22 PM »
Wevbasically had a charity case in one of our rental properties for a few years (we did decide to treat it as such). We had a nice tenant who hit some hard times when she got cancer. So for the next few years, we allowed her to pay whatever she could, when she could. She typically paid $200-300/mo. I think it was good that she still paid some sort of rent most of the time. This went on for a few years until she sadly passed away.

I have to say, I was very impressed with how well she kept up the house throughout that time. She was kept it clean and tidy and as nicely set up as possible. I had been a little worried.

We originally agreed to take on her boyfriend as a tenant after her passing but he left rather abruptly just a couple pf months later.

We now have a new tenant. When she fell on some hard times, we let her split up her rent into two smaller payments. At one point she ended up about a month behind. After some months, she did catch up again and now all is good. Currently we are not planning to offer the house as a charity project.

I guess I would suggest screening your tenants carefully. Personal interviews and asking for recommendations from people you trust could help a lot.

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AMandM

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Re: Compassionate landlording
« Reply #16 on: May 12, 2019, 07:34:40 AM »
I would go by word of mouth--let your circle of friends and family know that you have this place available, do they know anyone suitable? And by suitable I mean suitable as a tenant, not just in need of cheap housing. I personally know lots of people who could really benefit from below-market rent: grad students with families on small stipends, a refugee being helped by our church, a single mother who needs to finish school, new college or high school grads just starting their working life, a college student kicked out by her parents, etc. Not all of them would be reliable as rent-payers.

At the same time, you have to watch yourself, to be sure you don't, AT ALL, feel that cutting them a break on rent gives you any say in how they spend their money. It's your choice to set the rent at a generous level, it's their choice how to use the financial advantage that gives them.  (To be clear--I'm not accusing you of this!)

rothwem

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Re: Compassionate landlording
« Reply #17 on: May 12, 2019, 08:02:59 AM »


I was under the impression that as a "one door" landlord (i.e. I do not have multiple apartments or houses) that I was not subject to the discrimination laws - perhaps that was naÔve, I'll have to check on that.

In a lot of states that only applies if youíre living on the property with the tenant. Iím not sure if it even applies to duplexes, since itís technically a different address.

tralfamadorian

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Re: Compassionate landlording
« Reply #18 on: May 12, 2019, 01:44:56 PM »


I was under the impression that as a "one door" landlord (i.e. I do not have multiple apartments or houses) that I was not subject to the discrimination laws - perhaps that was naÔve, I'll have to check on that.

In a lot of states that only applies if youíre living on the property with the tenant. Iím not sure if it even applies to duplexes, since itís technically a different address.

Instead of guesses- here is the HUD handbook with the federal laws.

https://www.hud.gov/sites/documents/FHEO_BOOKLET_ENG.PDF

Owner occupied and managed residential (1-4 unit) properties are exempt from most federal housing laws. Discriminatory advertising is always disallowed. State overlays can be more strict.

OP, since you said it's a separate property, you are responsible for following all federal housing laws along with any additional state housing laws. I would be very careful about how you describe what you are trying to do. Example from above- saying that you are looking to provide "family and friends" discount housing for single mothers is discriminating both on the basis of sex and familial status despite good intentions.

Personally, I wouldn't touch it with a 10 foot pole. Housing laws are taken very seriously and any applicants (or interested parties not allowed to apply) with better traditional qualifications could have a strong fair housing case against you. Another example- an older single person with FT employment calls you and says they heard from someone at church that you had a property for rent. You demur then later rent to a college student who will greatly benefit from the lower rent expense. The first person could file a housing case on the basis of age discrimination.

SwordGuy

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Re: Compassionate landlording
« Reply #19 on: May 12, 2019, 02:54:25 PM »
Section 8 will NOT get you what you want,

Not my experience with it.  We have multiple houses with section 8 tenants in them.   They take good care of the properties.
They are occasionally a few days late with their rent, otherwise they are model tenants. 

Don't assume "poor" is the same as "bad".   




LaineyAZ

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Re: Compassionate landlording
« Reply #20 on: May 12, 2019, 03:07:40 PM »
Thanks for the info and the website.  I will take it seriously and study everything. 

At this point it's premature because my elderly relative could live for another 5 or 10 years, or could pass away this year (they're a long-time smoker) - no way of knowing.  But I already feel more educated and I appreciate the feedback. 

Another Reader

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Re: Compassionate landlording
« Reply #21 on: May 12, 2019, 05:47:27 PM »
Section 8 will NOT get you what you want,

Not my experience with it.  We have multiple houses with section 8 tenants in them.   They take good care of the properties.
They are occasionally a few days late with their rent, otherwise they are model tenants. 

Don't assume "poor" is the same as "bad".

This may vary among markets and the agencies that run Section 8 programs.  In Phoenix, I would not consider Section 8.  My houses are priced above the limits anyway, as rents have increased dramatically.

Goldielocks

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Re: Compassionate landlording
« Reply #22 on: May 12, 2019, 06:53:00 PM »
DON'T DO IT!

My story -- I recently took over the volunteer "Building" portfolio for our church.  Part of it is the ex-parsonage SFR rental that we own  and rent out.   The original thought was to rent it out at a discount to market rent, to a family that could really use the break, and needed help.

Now, 10 years later, because of rent controls, the rent is lower and lower compared to the market rate around us.  The renters are great quality renters.... but obviously no longer needs any sort of rental support.  Both are working, driving nice cars, participate in lots of sports with their kids, etc.

We would want to provide that discount to another family that could really use it, but can't.

Next time, I highly recommend starting at market or just under, and then providing a housing subsidy / donation through a local charity... it could even go to your own renters... but the key is that they need to reapply each year, and based on incomes, (we use tax returns) would or would not qualify to continue to receive the subsidy.


Dicey

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Re: Compassionate landlording
« Reply #23 on: May 13, 2019, 10:54:42 PM »
Nobody has mentioned the IRS. I hear they don't like it when folks rent out their units at below market rates, especially if those tenants are relatives. Dang it, I always miss @Cheddar Stacker, especially when topics such as these pop up. Not sure this batsignal will reach him. Any other tax accountants or CPAs in the house?

LaineyAZ

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Re: Compassionate landlording
« Reply #24 on: May 14, 2019, 07:42:45 AM »
Actually my tax accountant has mentioned the market rate issue.  I told her the truth:  the place is a dump, original 1950s kitchen (and not in a cute way), holes in some walls, and lived in by a smoker and semi-hoarder.  The rent my relative is paying is not far from what I could get from anyone else willing to live in those conditions.
 
My understanding is that if the rent was greatly different than market rate then my relative would have to declare that difference as income on their taxes.  To me, that's a bizarre rule:  you as the landlord are trying to give them a break financially and then the IRS comes and nullifies that.  What a mess.

 

Peachtea

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Re: Compassionate landlording
« Reply #25 on: May 15, 2019, 08:52:13 PM »
Why not talk to some of your local housing authorities about what you can and cannot do in trying to provide affordable housing to those in need? Iíd think they could at least point you in the right direction for further resources.

https://www.phoenix.gov/nsd/programs/landlord-tenant-counseling

https://housing.az.gov/notices-deadlines/new-lihtc-income-rent-limits-have-been-released

Certain discrimination laws only go one way, like age and familial status. I.e. Itís only age discrimination if your discriminating against those 40 and older or for familial status against those with kids, pregnant, or planning on kids, etc. They donít protect discrimination against 20 year olds or single people. And itís not so strict in encouraging groups as others made it sound like. For example, this doc from SD housing authority clearly states that advertising a place as Ďfamilies welcomeí isnít considered discrimination against other protected classes. http://www.sdhda.org/property-management-docs/867-familial-status-discrimination/file.html You just want to be cautious and take time to get advice on your local rules before posting an ad.

If you set a standard criteria and apply it to all applicants Iíd think itíd going be awfully hard for someone to successfully pursue a discrimination claim. If you said only available to tenants that make at or below the 150% poverty line for family size, what protected category does that discriminate against?

Thereís an entire federal program administered in partnership by states/cities to encourage private development of income based housing. (Not talking about section 8, but LIHTC.) While that program probably isnít a good fit for your situation since itís focused on tax credits for private development or rehabilitation of housing in exchange for reserving portions of rental units for low income households for x years, itís not immediately apparent why you couldnít of your own initiative implement its standards on your own. Again talk with your local gov agencies and then maybe an attorney...but definitely seems like something to explore more. Hereís the income chart and allowable rents under that program. The percentage is percentage of area median income (AMI) and so lower percentage equals lower income. https://housing.az.gov/sites/default/files/documents/files/IB-14-19-2019-LIHTC-Rent-Income-Limits.pdf


chasesfish

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Re: Compassionate landlording
« Reply #26 on: May 16, 2019, 05:41:44 AM »
OP, I bet you can find it kind of tenant you want by working with local churches or nonprofits who work with transitioning people to their own place. Placing notices on the open rental market is not the way to go.

I'm going to chime in here too as a board member of a human services not for profit.  Find a human services not for profit or a women's shelter and see if they want to rent the place at a below market value from you.  That lets the professionals who are in the business of humanity vet out the place and move people through that need it.

Lmoot

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Re: Compassionate landlording
« Reply #27 on: May 17, 2019, 02:18:00 PM »
Iíve my property for the last several years to coworkers. We work at a nonprofit, and itís just a part-time job for me, but a full-time job to the renters Iíve had. They work in an industry that is high in education, low on pay. So far Iíve only had amazing tenants who take better care of the property than I do and have actually increased renting value through upkeep and minor upgrades such as building a sand leveled patio and painting the front door, And other wall done paint repair jobs.

But I agree, word-of-mouth is the best way to go. That is the only way to ensure youíre not getting someone undeserving to your cause, or who may abuse your goodwill.

calimom

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Re: Compassionate landlording
« Reply #28 on: May 17, 2019, 06:06:47 PM »
OP, I bet you can find it kind of tenant you want by working with local churches or nonprofits who work with transitioning people to their own place. Placing notices on the open rental market is not the way to go.

I'm going to chime in here too as a board member of a human services not for profit.  Find a human services not for profit or a women's shelter and see if they want to rent the place at a below market value from you.  That lets the professionals who are in the business of humanity vet out the place and move people through that need it.

This is a great idea. And since it sounds like the property needs some rehab, there might be a local service group, like the Scouts or a church organization who could pitch in on the labor.

SunnyDays

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Re: Compassionate landlording
« Reply #29 on: May 20, 2019, 10:10:10 AM »
You could try approaching Habitat for Humanity, as I'm sure they get applications that they cannot fulfill simply due to supply and demand.  That way you will have people who have decent jobs and were prepared to put in sweat equity in order to own their own home.

rocketpj

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Re: Compassionate landlording
« Reply #30 on: May 26, 2019, 12:34:51 PM »
I have known single moms that have gone from welfare to college to work. They have successful careers and there kids have turned out well.

Me too.  The MC at my wedding went from welfare to uni to work as a high powered lawyer, and is now a judge.  All while raising a high needs adhd kid.

rocketpj

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Re: Compassionate landlording
« Reply #31 on: May 26, 2019, 12:50:37 PM »
I am in the middle of a 'compassionate landlording' situation myself.

I own a commercial building that happens to include 2 low apartments  (the wacky nature of commercial property valuation meant I got the whole building, with 44 other units, for the same price I could have bought a duplex). 

The 'downstairs' apartment is not a nice place.  Small rooms, weird layout, next to the electrical room (which means a low hum).  But it works for some people.  I pay the utilities (for now) and just accept that in the short to mid-term it won't be a great apartment. 

The current tenant is a nice guy.  He works insanely hard - 2 full time, low wage jobs plus some other stuff.  He is a (legal) immigrant, his English isn't great.  He is literally always at work, both of his jobs are within about 200 feet of the apartment.  He sends all his money either to his kids in the nearby city, or back to the Philippines to support his extended family there.  His 19 year old son also lives with him, and works for a local concrete company, and he also sends most of his money elsewhere.

All well and good.  I haven't raised the rent since I took possession (1.5 years ago), I've done a few minor upgrades in their apartment (while totally renovating the rest of the building).  There is close to a 0% vacancy rate in our community, we need people who work as hard as he does to be here. 

Currently, rent increases are capped at the rate of inflation in our province.  So the max I can increase it is 2.2%, and if I don't do it this year I can't add it next year.  My solution is to wait until December of each year - I don't want his $15, but I also don't want to be deep in a well and unable to get FMV when he does move out.  There is some talk of banning increases between tenants, which I hope never happens.

My problem is that he occasionally is short on rent.  Never by a lot, but it happens with some regularity.  And it is very hard for him to catch up, he has no spare cash at all.  So he gets ever deeper into owing me a bit more money every couple of months.  We've had a few go arounds with him paying me extra to catch up, then slowly falling behind again.

I have a few options.

1.  Eviction.  I can kick him out, renovate the apartment to being a 'higher low end apartment' and rent it for probably about $300 more than I am currently getting.  I'm pretty sure that makes him homeless or very close to it, and I have a lot of respect for the fact he works as hard as he does.  He is literally always at work, every day - 7 am to 3 at one job, then he walks over to the pub and works there until midnight or later.  Every day.  If he was hanging around smoking joints and playing video games I'd have booted him a year ago.

2.  Forgiveness.  I am required to do a bit of work in his place soon for overall building safety reasons, which will be disruptive for him for a week or so.  I am considering forgiving his overdue rent in exchange for the disruption, but then making it really clear that further late rent will result in immediate eviction (within the law, of course). 

LaineyAZ

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Re: Compassionate landlording
« Reply #32 on: May 27, 2019, 11:30:00 AM »
Seems like option #2 will be fair, and also underscore the importance of timely rent payments.  (of course, I'm only a landlord to an elderly relative so I'm not in that same situation.)


rocketpj

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Re: Compassionate landlording
« Reply #33 on: May 28, 2019, 01:50:29 PM »
Yeah I'm likely to just let go of the overdue rent, or at least a big chunk of it, in exchange for the work and disruption.

There is a conflict of compassionate landlording of course.  I just rented a storage unit to a nice elderly woman who is losing her rental home and is desperately looking for a place to live for the next decade or so.  So by continuing to let the other guy get away with not paying, I am also not renting to any nice old ladies that come along looking for quiet, stable housing. 

There is no easy answer.  Like I said, if he was lazy or just sitting around smoking pot all day he'd have been gone a year ago.  But I see him working constantly, I think the poor guy gets about 4 hours off every week where he is actually awake. 

Bobberth

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Re: Compassionate landlording
« Reply #34 on: May 28, 2019, 02:29:47 PM »
I agree with those suggesting you contact a local charity. My wife and I wanted to do the same with one of our apartments so we contacted the local refugee relocation organization. It was a strange beginning with not much information and trying to get their end in order but then after 3 weeks of nothing I received a phone call that a family was arriving in two days and they needed to do an inspection. I met the inspector at the apartment, he approved it, gave me the deposit and first month rent and I gave him the keys. They moved the family in and paid their first 3 months rent. After that I would stop by and pick up the rent from them. The family has now been there about 50 months. The kids that are in school are nearly fluent in English and the parents and I rarely have to use Google Translate any more. They are saving to purchase a house now. We've had them over to our house for Thanksgiving and Christmas and they have had our family over for several meals. It's been a great experience for them and us. With the deferred maintenance (old brick buildings always need tuck pointing somewhere) and improvements, I lose money per year on the building because of the discounted rent but my heart is full that I get to be a part of their coming to America story.

My apartment is 3 bedroom so it worked great for a family. Your 1/1 won't work for a family but there are lots of singles or couples who could use the help. Just find a charity who has a mission you support and contact them.


BlueHouse

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Re: Compassionate landlording
« Reply #35 on: May 29, 2019, 12:18:11 PM »
Along the same lines as others who suggested contacting a local charity, but I'd go one step further and get involved with a charity you believe in NOW, and get to know some of the consumers and clients.  You'll get a feel for the people and their circumstances and you'll know when you meet the right people for the house.  And until the house becomes available, you'll be helping those that you want to help in the future.

And, thank you for thinking of others!

clarkfan1979

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Re: Compassionate landlording
« Reply #36 on: June 03, 2019, 01:56:55 PM »
A question for the future:
I have a tiny 1/1 single family home in downtown Phx AZ.  No mortgage.  Property has nice front and back yards with irrigation, mature landscaping, and lots of space for parking.  Have an elderly relative in there now paying the "family discount" rent.

My question is that after this relative passes away, I'd like to rent it to an individual or small family who could use a break financially but would otherwise be good renters.  I know that may be asking for the impossible, but I don't need or want to squeeze every dollar out of this property.  I have a lot of interest in affordable housing and since I'll be in a position someday to provide that, I'd like to help someone out. 
How would I go about finding some renters who are truly in need and avoid scammers who just want cheap rent?  or is this just a pipe dream?

I would not advertise and I would reach out to local churches. If you really want to help as many people as possible, I would put a 2 year maximum on living there. I would want to help them in the short-term and get them to help themselves in the long term.

frugledoc

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Re: Compassionate landlording
« Reply #37 on: June 06, 2019, 02:10:56 AM »
[quote author=Another Reader link=topic=104982.msg2369950#msg2369950 date

When I do get a good tenant that is struggling financially, I will back off on rent increases.  I have one situation now with a long term tenant whose spouse has cancer and can't work.  Not raising their rent.
[/quote]

Wow how generous lol

BlueHouse

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Re: Compassionate landlording
« Reply #38 on: June 11, 2019, 07:21:52 AM »
Wow how generous lol

And your comment is so generous too. 

That's pretty obnoxious to judge anyone else on their giving.  You're talking about someone's income, possibly their sole income, and they are restricting their own earning potential simply to help someone else. It IS generous.   

martyconlonontherun

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Re: Compassionate landlording
« Reply #39 on: June 14, 2019, 09:20:51 AM »
DON'T DO IT!

My story -- I recently took over the volunteer "Building" portfolio for our church.  Part of it is the ex-parsonage SFR rental that we own  and rent out.   The original thought was to rent it out at a discount to market rent, to a family that could really use the break, and needed help.

Now, 10 years later, because of rent controls, the rent is lower and lower compared to the market rate around us.  The renters are great quality renters.... but obviously no longer needs any sort of rental support.  Both are working, driving nice cars, participate in lots of sports with their kids, etc.

We would want to provide that discount to another family that could really use it, but can't.

Next time, I highly recommend starting at market or just under, and then providing a housing subsidy / donation through a local charity... it could even go to your own renters... but the key is that they need to reapply each year, and based on incomes, (we use tax returns) would or would not qualify to continue to receive the subsidy.

In the grand scheme of things, is it a good outcome? Took a unstable family with housing insecurity and allowed them to bring themselves out of poverty? Would it be nice to help another family? yes but could you just raise the rent to maximum amount each year until its closer to market rental and keep the housing stable?



Weird timing on this as I was about to post after listening to "Evicted" all week on my bike rides.  Naive me wants to buy a house (I'm in Milwaukee and houses in inner city are still <$50k which would mean <$5k a year on mortgage/taxes. Rent at $400 (half of going rate) would cover utilities with money left over and in my pipe dream I would probably use the rest of the payment for slow upgrades/dropping off food. $5k and you know you totally changed a family's life around. Give the tenants a reason to stay and take care of the house instead of the continuous moving. Making at least one stable home in the neighborhood.

On the flip side, the book basically puts it back into perspective. Too many threats of violence, tenants destroying the place, relatives moving in and causing trouble, houses becoming a cesspool, clogging pipes, etc 

LaineyAZ

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Re: Compassionate landlording
« Reply #40 on: June 14, 2019, 09:16:47 PM »
I've also read the award-winning Evicted and saw the author being interviewed.  He admitted he was personally affected by doing the months of research and writing of this book, to the point he suffered from depression afterwards. 

The telecast of his book tour had audience Q&A at the end, and he was asked by attendees what they could do.  His first answer was, simply, to give someone shelter if you can possibly do it.  Here in metro Phoenix there are mobile home parks with on-site used trailers for sale that are very inexpensive.  Many of these are senior-only parks (meaning at least one person has to be age 55+), but I'd thought that since some of these go for as little as $10,000 or $15,000, you could almost crowd-source enough $ to buy a few of these and at least get some seniors and a few of their relatives into affordable safe housing.  Then they'd only have to pay the lot rent and electricity.

However, I agree with martyc as far as the downside risks as discussed in the book:  financially, emotionally and mentally unstable people, tenants who don't seem to care that pouring grease down the pipes will ruin them, violence and personal drama affecting neighbors, etc. 
So the ideas above about getting names of potential tenants via a non-profit or other group who could vouch for these people does make sense as a starting point.

iris lily

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Re: Compassionate landlording
« Reply #41 on: June 16, 2019, 09:28:34 AM »
Dont know why I didnt mention this:Section 8 vouchers. Ne a section 8 landlord.

You have to jump thru government i spection hoops, but the tenants are pre-qualified as poor people.

Edited to add: oh, doh, I see that section 8 has already been mentioned and is a no go.

Goldielocks

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Re: Compassionate landlording
« Reply #42 on: June 17, 2019, 11:52:23 AM »
DON'T DO IT!

My story -- I recently took over the volunteer "Building" portfolio for our church.  Part of it is the ex-parsonage SFR rental that we own  and rent out.   The original thought was to rent it out at a discount to market rent, to a family that could really use the break, and needed help.

Now, 10 years later, because of rent controls, the rent is lower and lower compared to the market rate around us.  The renters are great quality renters.... but obviously no longer needs any sort of rental support.  Both are working, driving nice cars, participate in lots of sports with their kids, etc.

We would want to provide that discount to another family that could really use it, but can't.

Next time, I highly recommend starting at market or just under, and then providing a housing subsidy / donation through a local charity... it could even go to your own renters... but the key is that they need to reapply each year, and based on incomes, (we use tax returns) would or would not qualify to continue to receive the subsidy.

In the grand scheme of things, is it a good outcome? Took a unstable family with housing insecurity and allowed them to bring themselves out of poverty? Would it be nice to help another family? yes but could you just raise the rent to maximum amount each year until its closer to market rental and keep the housing stable?

There is no way to raise the rent each year to even match the growing costs of the building.   The max rent increase allowed each year in our jurisdiction barely pays for the increase in property taxes and water fees...the past two years the max was 2% for example.  Yet the cost of increasing repairs means that one day it will cost us money out of pocket to continue to rent out the property ... even though there is no mortgage on it and we get a modest rent.   

When that day comes, we will need to evict the tenants or get them to agree to a rent increase more than market rates.  Neither are good options.   

The renters have been in there for over 10 years now, and the minor annual rent increases are not keeping pace, so starting at a "discount" originailly, which helped them a lot for the first 2-3 years is now becaoming an albatross.   After all, not many people would move when they are paying only 65% of market value for rent.

A Fella from Stella

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Re: Compassionate landlording
« Reply #43 on: June 26, 2019, 07:39:31 AM »
Charge market rate, and make sure it's really nice.