Hi there, I`m looking at a property that cashflows, is 50 years old and in pretty good condition. The tenants have lived there for 30 years, they are a relatively large family - it`s a pretty small house. I"m just wondering if anyone has had tenants on social assistance and if you have any thoughts or advice on this. Right now the rent on the house is $700 and I don`t imagine I could raise it much more given that they are on social assistance. Any thoughts would be most welcome! Thanks, Stephanie
tenants on social assistance
- Thread starter Stephanie
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- May 29, 2008
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QUOTE (Stephanie @ Aug 6 2008, 12:26 PM) Hi there, I`m looking at a property that cashflows, is 50 years old and in pretty good condition. The tenants have lived there for 30 years, they are a relatively large family - it`s a pretty small house. I"m just wondering if anyone has had tenants on social assistance and if you have any thoughts or advice on this. Right now the rent on the house is $700 and I don`t imagine I could raise it much more given that they are on social assistance. Any thoughts would be most welcome! Thanks, Stephanie
30 year tenants...wow. Have they been good tenants?
Social assitance should get increased by the cost of living increase each year. If you follow those increases, as little as they are then you should stay within their affordability range.
Personally, if it cashflows and they are ok tenants then continue on, if it isn`t broke don`t fix it. We are also not in the game of throwing out tenants for the sake of wanting more money
I`m guessing you are looking to buy the property. If it cashflows at 700$ rent then it is likely an inexpensive property. Being 50 years old are there many pending repairs? If you were tomake those repairs and finance it through LOC would it still be cashflow positive? Or another way to look at it is that if you put 10% a month aside from future renovations does it still cash flow?
Real(who doesn`t own a property yet so take this feeble advice with a grain of salt) <grin>
30 year tenants...wow. Have they been good tenants?
Social assitance should get increased by the cost of living increase each year. If you follow those increases, as little as they are then you should stay within their affordability range.
Personally, if it cashflows and they are ok tenants then continue on, if it isn`t broke don`t fix it. We are also not in the game of throwing out tenants for the sake of wanting more money
I`m guessing you are looking to buy the property. If it cashflows at 700$ rent then it is likely an inexpensive property. Being 50 years old are there many pending repairs? If you were tomake those repairs and finance it through LOC would it still be cashflow positive? Or another way to look at it is that if you put 10% a month aside from future renovations does it still cash flow?
Real(who doesn`t own a property yet so take this feeble advice with a grain of salt) <grin>
I would look at how well the property is looked after. If it is immaculate and the property cashflows then I would consider not rocking the boat. However, I would look at market rents in the area, so you are fully aware of how much you are giving up. Also, if they are not doing a good job of looking after the property, irregardless of there situation, I would write the offer with no tenants. I also am not sure, but I believe social assistance to some extent will keep up with inflation. You could probably call the government agency and just ask them how it works. The more knowledge you have the better able you will be able to make your decision.
Prev advise is all good. If it cashflows- That is great!
Some people on social assistance are very good people it just happens that some will have no other choice I know of a lady who has rented from same landlord for 10 years -
She goes to church, does not smoke or drink but due to a problem in her knees cannot work- she keeps her place very clean and pays her rent on time - So do your due diligence - And you may have a win-win situation in your hands!
All the best,
Candi.
Some people on social assistance are very good people it just happens that some will have no other choice I know of a lady who has rented from same landlord for 10 years -
She goes to church, does not smoke or drink but due to a problem in her knees cannot work- she keeps her place very clean and pays her rent on time - So do your due diligence - And you may have a win-win situation in your hands!
All the best,
Candi.