Renting to a Sober Living Business

9 Replies

I have an extremely large duplex, each side 5 bed, 2 bath. A sober living business owner has approached me to rent half of the building. I think it would only make sense if they ended up renting both sides. I’m concerned about so many people coming and going disturbing the other half of the building. This is in a newly hot area with lots of revitalization. It seems like a very stable idea to rent to a potentially long term business, but I’m not sure how the community will react. Any advice?

@Erin Luedeke whenever I have any type of subsidized program or community program like this approach me, I always think through how hard it is to get a regular, market rate tenant. If I can easily get market rate tenants, then I will almost always go with that. I am approached quite a bit by programs like this here in the Chicago area, and I still haven't ever worked with one. The main thing these types of situations buy you is consistent rental income, but if you can already get that with a less risky tenant... why bother? 

John, Thank you for your advice. I think you are 100% right.  I was thinking I should do the kind thing by helping to create a space for these people, but in reality, it would be anything but kind to all of the neighbors in that area.

Originally posted by @John Warren :

@Brandon Trowel that is a great question. I have never gone down this road, but if I did I would definitely make sure my insurance agent ran through this for me. 

while important I suspect this is not a situation that causes a lot of loss for an insurance carrier.. But I would rent the whole building for sure.

having experience with this on a persona/family level they are highly transient. And looking to create a few of them myself. 

 

As a piggyback to @Erin Luedeke 's note, "commercial" operations in a "residential" property can get murky from an insurance coverage perspective. There will always be an insurance company that is willing to ACCEPT premium (i.e. take your money), but just because premium is paid and you have "a policy" in hand doesn't mean the coverage TRULY meets your needs - thanks for the research that was prompted Erin 👍🏾

Originally posted by @Jay Hinrichs :
Originally posted by @John Warren:

@Brandon Trowel that is a great question. I have never gone down this road, but if I did I would definitely make sure my insurance agent ran through this for me. 

while important I suspect this is not a situation that causes a lot of loss for an insurance carrier.. But I would rent the whole building for sure.

having experience with this on a persona/family level they are highly transient. And looking to create a few of them myself. 

 

Did I understand you right? It appears that you’re saying you are looking to start a few of the same kind of businesses. 

Originally posted by @Joe S. :
Originally posted by @Jay Hinrichs:
Originally posted by @John Warren:

@Brandon Trowel that is a great question. I have never gone down this road, but if I did I would definitely make sure my insurance agent ran through this for me. 

while important I suspect this is not a situation that causes a lot of loss for an insurance carrier.. But I would rent the whole building for sure.

having experience with this on a persona/family level they are highly transient. And looking to create a few of them myself. 

 

Did I understand you right? It appears that you’re saying you are looking to start a few of the same kind of businesses. 

Just noodling it  as its a family issue..  

 

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