renting to adult foster home

7 Replies

Hey everyone I'm new to the investing seen and just started my first buy and hold. I'm getting ready to rent for the first time to two couples. They're intention is to turn my 5 bedroom 3 bath single level home into an adult foster home.  My questions are, is there a special rental agreement I should do for renting to two families, or do they each fill out separate agreements? should I have any additional contracts that keep me clear from any sort of liability? Thank you and any additional advice about this would be really helpful.

Is that even allowed in your area?  That's a commercial business and may be prohibited by zoning regulations.  Are these two couples going to live there or are they just the landlords who are then placing other people into the house?  If so, this is really a commercial arrangement and not a residential lease at all.  Consult an attorney.  Commercial leases are very different beasts than residential.

Wow! Thank you very much. I didn't think about those questions. I know they currently have one down the street up and running, but that doesn't mean that its legal. I just assumed they already did the foot work and it was legal because my house had to be inspected by an outside source. I will do more research and seek legal counsel. 

I am facing a similar proposal. What did you learn after your research?

sorry it took me so long, after my research I found that not only is it legal and not commercial but in fact is illegal to discriminate against them... I have now rented to them for over 6 months and couldn't ask for better tenants. There is also a lot of security that they will be there for along time considering how much they cost to set up on they're side.

@Kevin Lehna

Can you elaborate a little more about how this works and what an adult foster home is.

It sounds interesting and another investment vehicle that I have not looked into before.

ya, so an adult foster home is a assisted living home owned by a "smaller company." They are based out of a residential home, I have found they prefer at least 4 bedrooms. They can house up to 5 elderly people and require 24 hr personnel so they have a live in employee, or the owner depending on the size of the operation. There can be two elderly people in one room if necessary so that's why at least 4 bedroom because the live in will require a seperate room. Also they  prefer at least 1 walkin shower it makes they're job a lot easier. I have found they are amazing tenants and have to keep up the house because they have constant family traffic of the elderly. I am already in talks with my customers about helping them expand and purchasing another large home for them to grow into.

@Kevin Lehna How much do you rent it for? How does the lease structure look like?  Just curious.

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