rent subsidies

[kir]

Hi ,
I have two rental porfolios that have tenants who actually get 100% subsidies from
some Alberta Social services (not sure what the exact names are) and one other from a first nations program. Do any of you have any bad experiences with such subsidy programs.
I see it as good and bad. It could lead to very long-term tenants...but it does have some risks.

Any thoughts?

Kir Luong
Sterling Realty,
780-995-4050.

 

[ChrisDavies]

Typically not a problem, the rent shows up on time. You just have to make sure the tenants aren`t a problem. We did have one organization in Leduc that never could get the amounts right, but they were cheerfully willing to correct the problem.

 

[klewlis]

Third party rent payment has to be a good thing! AISH and Alberta Works both do third-party rent (including the extra subsidies that they provide) so it guarantees that you get paid on time, for as long as the tenants are living there.

I wouldn`t assume that a tenant will be a problem solely based on the fact that they are subsidized (and it`s illegal for a landlord to discriminate based on source of income). It`s true that there *may* be an increased risk of problems, but on the other hand you have a lot of subsidized people who are just as clean-cut and hardworking as you and I but who have fallen prey to circumstances beyond their control (such as injury preventing work). And then you have non-subsidized people who party and wreck the place... so you take a risk no matter who your tenant is.

With that said, I should mention that I`m not a landlord (yet) so I don`t have first-hand experience with that perspective--but I hope that when I am a landlord I will be willing to give everyone a chance, especially those that have had the hardest time.

 

[invst4profit]

As with any landlord tenant relationship it is not about giving everyone a chance it is all about pre screening and placing the best tenant for the level of housing you provide. Doing the background, credit and criminal checks should allow you to eliminate any high risk tenant without discrimination. Should a landlord chose not to rent to individuals because they are supported by an agency there credit rating is often reason enough to reject.

 

[klewlis]

QUOTE (invst4profit @ Sep 24 2008, 06:24 AM) As with any landlord tenant relationship it is not about giving everyone a chance it is all about pre screening and placing the best tenant for the level of housing you provide. Doing the background, credit and criminal checks should allow you to eliminate any high risk tenant without discrimination. Should a landlord chose not to rent to individuals because they are supported by an agency there credit rating is often reason enough to reject.

sure, but if you can give someone a chance AND maintain your cashflow, then why not?

 

[invst4profit]

If you are suggesting that by giving someone a "chance" you are accepting a tenant that does not meet your minimum standards in background checks then you are taking a illogical risk on a stranger.
Charitable but a poor business practice.

 

[selias]

My 2 cents
I am a "good" person who thought I should "help" someone in need. This was a while ago and was also my first time selecting a tenant. I kept thinking "Don`t do it, it`s an emotional decision". BTW, a credit check confirmed I shouldn`t rent it to the "abused" woman but she had a story to blame everyone but herself. Long story short and my advice to you; get screwed once if you would like... and that will cure you from future poor BUSINESS decisions. OR just follow REIN`s landlording advice, then spend the extra time saved with your family.

 

[ChrisDavies]

I`d suggest putting money or time towards a charitable cause, rather than taking chances with your business. As someone who`s helped manage over a thousand suites, and done lots of dispute resolution and evictions, you`re going to get screwed 9/10 times. If you`re going to be `nice`, decide which suites in which buildings you`re going to do that with, and only make it one of every ten or so. Alternatively, help out other causes, and let your tenants get involved.

 

[klewlis]

I`d like to respectfully disagree. As long as my cashflow remains positive, I personally believe that it is my duty as a good citizen to help other people... and one of the big problems in Alberta right now is homelessness and a severe lack of affordable housing. I think it`s a false dichotomy to think that one cannot have a good, profitable business and also use that business to benefit others... and if I`m wrong about that then I guess I won`t make a very good business person.

Another thing to consider: It costs us, as tax payers, significantly more to leave someone homeless than to provide them with affordable housing and the supports they need to maintain that housing. Would we rather foot the bill in our taxes or would we rather be a part of the solution?

 

[invst4profit]

Again, charitable but it is unlikely your cash flow will remain positive for long. You have read the comments from those with experience and disagree. My advice is you separate your feelings from your business in selecting tenants.
Affordable housing is best left to charitable organizations not interested in profits. However should you decide to follow this path and save me tax dollars at the same time then you have my vote.
Good luck.

 

[GregGillespie]

Hi,

I have to agree with the current property owners--a charitable approach to landlording may not make for a sustainable business long term...but if this is your passion then perhaps you have just found your niche.

Greg


QUOTE (klewlis @ Sep 25 2008, 11:35 AM) As long as my cashflow remains positive, I personally believe that it is my duty as a good citizen to help other people... and one of the big problems in Alberta right now is homelessness and a severe lack of affordable housing. I think it`s a false dichotomy to think that one cannot have a good, profitable business and also use that business to benefit others... and if I`m wrong about that then I guess I won`t make a very good business person.

 

[klewlis]

QUOTE (GregGillespie @ Sep 26 2008, 11:17 AM) Hi,

I have to agree with the current property owners--a charitable approach to landlording may not make for a sustainable business long term...but if this is your passion then perhaps you have just found your niche.

Greg

I`m not saying that ALL of my tenants would be subsidized... but I would definitely be open to discussing it for a portion of them. I certainly would never assume that just because someone is subsidized they are going to be a problem, and I guess it`s that stigma (even prejudice) that I think needs to be squashed among the landlord community.

And yes, it`s true that I don`t have the experience from the landlord`s side but I have experience in working with people from the other side and I know that for many of them it is simply uncontrollable circumstance--not any fault of their own--that puts them in that situation.

In any case, we`ll see what happens if/when I am in that position!