Why One Man Just Gave Away a $4M, 24-Unit Apartment Complex
Rick Steves—you may not initially recognize the name, but you’ve likely stumbled upon his popular travel show, Rick Steves’ Europe, which debuted on PBS in 2000. With a slogan of “Europe through the back door,” this program features shots of Rick meandering through picturesque European locations, living out what many of us might consider to be the ideal job.
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A Passion for Affordable Housing
These days, though, Rick is becoming known for something a little different. After amassing a small fortune through his long-running television programs and a series of successful travel books, he began focusing on one of his long-time passions: affordable housing.
How does this concept have anything to do with a life of travel? Explains Rick:
“Before ‘Europe Through the Back Door,’ my travels were ‘Europe Through the Gutter.’ Slumming through Europe as a teenage backpacker, life for me was the daily challenge of finding an affordable (i.e., free) place to sleep. With my rail pass, I’d sleep on a train four hours out, cross the tracks, and sleep four hours back in. I’d sleep on a ferry (covered by the rail pass) between Stockholm and Helsinki on successive nights to afford spending entire days of sightseeing alternating between the two most expensive cities in Europe. I’d sneak into my friends’ hotel rooms and sleep on the floor (restlessly and stressed-out…but free). I’d sleep free on the pews of Greek churches, on the concrete floors of Dutch construction projects, and in barns at the edge of unaffordable Swiss alpine resorts. How else would a white, middle-class American kid gain a firsthand appreciation for the value of a safe and comfortable place to sleep?”
The Decision to Give Away a $4M Apartment Complex
With this cause close to his heart for decades, Rick acted on his convictions by purchasing a 24-unit apartment complex, which he allowed the YWCA to use. Housing single moms who were often recovering drug addicts working to put their lives back together, this complex frequently gave women a stable environment in which to regain custody of their children.
Speaking from both a compassionate and business-minded perspective, Rick comments:
“Twenty years ago, I devised a scheme where I could put my retirement savings not into a bank to get interest, but into cheap apartments to house struggling neighbors. I would retain my capital, my equity would grow as the apartment complex appreciated, and I would suffer none of the headaches that I would have if I had rented out the units as a landlord. Rather than collecting rent, my ‘income’ would be the joy of housing otherwise desperate people. I found this a creative, compassionate and more enlightened way to ‘invest’ while retaining my long-term security.”
Rick’s deal with the YWCA was set up such that Rick could take back control of the land and use it to retire by selling it or renting out the apartments for income. Comforted by the security of knowing he could regain the asset if push came to shove, Rick ultimately planned on willing the apartment to the YWCA if his situation allowed it. As time passed, though, he began to realize that he had more than he could ever use in his lifetime, and he made the decision to donate the building so that the YWCA could plan into the future, knowing the building was theirs.
Can every investor (or person in general) afford this kind of generosity? Of course not. Rick has undoubtedly been fortunate, skilled, and hard-working enough in his life to uniquely allow him to directly impact lives on the scale that he has. Still, it’s hard not to be inspired by the lesson his story presents: Do what you can, where you are, with what you have—and you may find you reap an entirely different kind of return on investment.
What kind of purposeful giving has real estate allowed you to do? How do you plan on giving back using the success real estate has given you?
Let us know your opinions with a comment!