I’m hoping to tap into the collective wisdom here for a situation I’m facing with one of my rental properties in Oscoda, MI.
I own a 3 bed / 2 bath single-family home free and clear. It’s currently being rented to a long-time family friend for $400/month. There’s no formal lease in place, and the rent is significantly below market—comps in the area suggest $1,200–$1,800/month. Between taxes and insurance, the rent barely covers carrying costs.
The tenant is elderly, lives alone, always pays on time, and is very easy to work with. Unfortunately, she’s on a fixed income and can’t afford a rent increase to market value. I’m not comfortable displacing her, as she has no family and would likely face serious hardship or even homelessness. At the same time, I’m trying to make this property work financially—either through reasonable cash flow or as a potential sale, but I realize selling might require her to vacate as well.
I’ve started looking into the Section 8 / Housing Choice Voucher (HCV) program as a possible solution. We’ve begun the process, but it appears there are no open vouchers for our region. From what I can tell, Northeast Michigan is severely underserved in this area, which limits that option for now.
I’m reaching out to see if other landlords—particularly those familiar with Michigan or similar rural/small-town markets—have navigated a situation like this. I’d love to hear:
Any programs or subsidies that might help her pay more in rent
Legal considerations I should be aware of if I try to formalize the lease at a reduced rate
Creative structures you’ve used to balance compassion with the financial needs of your rental business
Any experiences working with local nonprofits or Section 8 for tenants already in place
I’d really like to find a win-win if possible—keeping her housed while finding a way to make the numbers work. Open to any thoughts, resources, or even creative deal structures I might not be considering.
I’m hoping to tap into the collective wisdom here for a situation I’m facing with one of my rental properties in Oscoda, MI.
I own a 3 bed / 2 bath single-family home free and clear. It’s currently being rented to a long-time family friend for $400/month. There’s no formal lease in place, and the rent is significantly below market—comps in the area suggest $1,200–$1,800/month. Between taxes and insurance, the rent barely covers carrying costs.
The tenant is elderly, lives alone, always pays on time, and is very easy to work with. Unfortunately, she’s on a fixed income and can’t afford a rent increase to market value. I’m not comfortable displacing her, as she has no family and would likely face serious hardship or even homelessness. At the same time, I’m trying to make this property work financially—either through reasonable cash flow or as a potential sale, but I realize selling might require her to vacate as well.
I’ve started looking into the Section 8 / Housing Choice Voucher (HCV) program as a possible solution. We’ve begun the process, but it appears there are no open vouchers for our region. From what I can tell, Northeast Michigan is severely underserved in this area, which limits that option for now.
I’m reaching out to see if other landlords—particularly those familiar with Michigan or similar rural/small-town markets—have navigated a situation like this. I’d love to hear:
Any programs or subsidies that might help her pay more in rent
Legal considerations I should be aware of if I try to formalize the lease at a reduced rate
Creative structures you’ve used to balance compassion with the financial needs of your rental business
Any experiences working with local nonprofits or Section 8 for tenants already in place
I’d really like to find a win-win if possible—keeping her housed while finding a way to make the numbers work. Open to any thoughts, resources, or even creative deal structures I might not be considering.
We may not know enough about your situation… but you have to decide what type of operation you are running on this particular unit.
I respect the concern fur the tenant. And if you want to donate your property to such a cause that is clearly your choice. But at the end of the day a rental is usually a business… not a charity. Again, my hats off to you if you choose the charity route… but there is such a thing as being too caught up in your tenant’s lives. It is not your responsibility to fend for your tenant. I too have gone to bat for a tenant where they got behind and I literally found them $11,000 in Covid related grants to support housing stabilization to not only catch up what they were behind on, but also pay 3 months forward rent. 6 months later they were behind again. About once a year I have to pull out the “it’s either get caught up, or get out” card… and they always get caught up. Section 8 almost always has a multi-year wait for a voucher. There is never enough supply.
My best suggestion is to set up a path that puts your rent where it needs to be, and then it is essentially HER responsibility and choice whether to stay.
When I have taken over units where the rent was way too low, I went to the tenants and said, “With the sale price of this unit, the rent has to increase to where the unit isn’t losing money.” Therefore this month’s rent will be what you paid last month, next month’s rent will be 1/2 closer to the target rent, and the 3rd month and beyond will be at that new target rent. This gives the tenant the better part of 60-90 days to sort out whether they want to stay and pay more, or find another place to live. So I am providing a reasonable path that allows them time to look around, and decide what to do.
I get that may not fit your scenario exactly - but I also suggest it’s not your responsibility to be a charity if your goal is to be a for profit business. There is a place for both… you just have to decide what your purpose is for that unit. There likely isn’t a win-win situation that involves your unit unless you can find another source of revenue for her… perhaps sponsorship, etc.
I would start with seeing if she is a member of a church, Congregations will sometimes support hard pressed members. Another thing you can check out is to google “emergency rental assistance “ plus your city / county / state. There are sometimes programs that you may not know about out there…. But typically they are single or short term use. During Covid there were many grant programs… but less now.
Family is always a great go-to… but if there is no family you have to expand to find someone who can hopefully either offer financial assistance, or a program that can take her in as a resident, etc.
Realistically she should be receiving social security, and perhaps if she is so low-income she may qualify for other government / charitable assistance. I would reach out to your local government and inquire about any programs that could possibly either support her, or offer her a different living situation.
by formalizing a reduced rent you actually lock yourself into receiving that lower rent. The better thing to do is to formalize the higher rent and then seek to find someone to help support her if you are going to insert yourself into her situation. I would establish a timeline by which rent will be where you want it and let it be her responsibility to solve. You have no idea if she may have someone who could be a benefactor to her, and probably won’t until more rent is due / overdue.
1) - get her on a MTM lease! You have so much potential exposure w/o one!
2) How do you know what she can afford? - Have you gone over her bank statements to see actual income vs expenses?
3) Can she qualify for foodstamps or utility assistance porgrams?
4) Advertise for two roommates! - 3 tenants each paying $400 = $1200/month!
This is awesome!
For sure... Good on you as the home owner for your compassion but allowing this to continue indefinitely is doing everyone a bit of a disservice. You, for obvious reasons. The tenant is unfortunately living outside of reality and may not know or understand it. This is tough. Would like to hear how it pans out for you. I think you can definitely find a middle ground.
New to Real Estate · San Jose, CA · Member since 2019 · 8 posts · 4 votes
1y
I agree with Drew. Why does a single elderly lady need a 3 bedroom all to herself? It's not good for elderly people to be alone anyway. Finding 2 other elderly people who probably need an affordable place to live and who would benefit from living in community with others their age seems like a win win win.
Austin, TX · Member since 2019 · 5k+ posts · 5k+ votes
1y
It's troublesome to know that someone who needs housing assistance from section 8 cannot get it.
Maybe section 8 is available in another county that is close by, and she would qualify for it there and you can help her to find somewhere to live there .
Since she is a family friend I assume you will approach this differently than you would just as a businessman looking to make a profit on the deal.
Of course she may have lived in Oscoda her whole life and be a little uncomfortable moving to a new place because she knows the neighborhood and has many memories there and Etcetera, but may be a nice car trip over to a new place saying look this is a possibility to live over here and here's where the store is to get groceries, you can buy cigarettes over here, here's the old folks cultural center down the road you could walk there if you needed to.
Just pick a place that's low crime and that you can still go visit your friend, not too far away I mean.
