How to be a socially responsible landlord

How to be a socially responsible landlord

Saugerties, NY · Member since 2017 · 81 posts · 33 votes

Hi BP community!

I'm just starting out in REI. I'm looking for thoughts or feedback for me on what it means to be "socially responsible" when it comes to REI and property management.

Anyone think I'm being naive? :)

I put together a list of best practices for socially responsible landlords. Here are the highlights:

1. Know the landlord-tenant laws in your city/state and follow them.

2. Inform yourself about organizations and programs in your community offering housing assistance to people who need it, even if you’re not providing “affordable housing.”

3. When posting a vacancy, be explicit about who is welcome to apply.

4. Post vacancies where people who may have a hard time finding housing will see them.

5. Keep your yard looking awesome (and landscape sustainably).

6. Meet your neighbors! And make sure they know how to get in touch with you if they need to.

7. Help your tenants get involved in their new community.

8. Consider setting policies that empower tenants, going above-and-beyond legal requirements.

Would love your thoughts! 

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Alex CraigBusiness Member
Real Estate Professional · Memphis, TN · Member since 2009 · 1k+ posts · 1k+ votes
9y

@Megan S. Not naive at all, but you should be careful as some tenants will take advantage of over the top kindness. Been there, done that. Your ideas and thoughts are good and genuine. If all landlords thought this way, there would be less slumlords. I caution not to overthink the business. The most successful landlords are ones with long term tenants, which is accomplished by some of the things you listed.

Further thoughts below.

1.  Agree. Not knowing this can cost you big in the long run as some tenants could call building code. Any PM or landlord not following the laws will not be successful in the long run with tenant retention. 

2. Every city/state/county differs. We do not offer section 8 in Memphis anymore for several reason, namely the way the office operates and the amount of work needed to be done each year can be high to renew the program. Some programs can get cut too or are just temporary. We rented to a person who had been a victim of domestic abuse.  She moved in and had the first 4 months of her rent paid until she got on her feet.  She never made another payment after the  4 months. Sh  I have found the best tenants are the ones who qualify the best.  That is my Memphis opinion. In LIttle Rock, we utilize section 8 and it works great.  

3. Be careful here.  There are fair housing laws that come into play here. To be safe, I would leave this out and assume anyone is welcome to apply. Now if you have something like a handicap ramp, I would include that in your property description. I believe you can say Section 8 welcome, but if you do that, I am thinking you should probably include that in all your listings so that you could not be accused of segregating section 8 only to certain areas.

4. Never a bad idea. The more marketing the better. Last time I checked, something like 70% of our move in's found our property through online marketing.  Even our low income housing tenants have smart phones.  Be socially responsible, but don't ignore what works and that is online marketing. 

5. 100% agree when vacant.  I never understand why landlords do not spend $150 to lay some mulch and plant some bushes. When the place is occupied, most markets for single family homes require the tenant to do. MF, the landlord does. I have a few MF and always make sure the grounds look good as I want tenant retention. 

6. 100% agree here too. Give them your email or emergency phone # in case  they need to contact you. They can be your eyes and ears. 

7. I would create a flyer that list things they can get involved, but I wold not go beyond that. Keep the relationship professional. Always be nice, but you are not their friend, you are their landlord.  You may have to evict this person one day and do not want personal feelings getting in the way. You can be socially responsible without turning your for profit business into a charity. 

8. Not sure what you mean here. Can you elaborate? As a landlord, your responsibility here is to provide a nice place to live, maintain that place and be responsive to maintenance needs within the guidelines of your lease. In return, they pay the rent and get to say. That is the nature of the business and that is a Win-Win.  All a tenant wants is place to live that is maintained.  The response we get the most of why tenants left their last place is "bad PM/landlord." Second is dissatisfaction with the unit/found nicer place to live.  That is something like 60% of why people move. You can control those 2 reason why people move.

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  • Rental Property Investor · Cincinnati, OH · Member since 2017 · 258 posts · 207 votes
    9y

    @Megan S. I think social responsibility is important for a landlord. If you are dealing C/D class tenants you want to be considerate of their situations because they don't have the means for excess fees and constant rent increases but still deserve a good place to live.

    1) Know the law, make sure you don't interfere with their quiet enjoyment of the premises, but also make sure they respect their neighbors rights too.

    2) Hold them accountable. The majority of your tenants pay their rent on time. However, sometimes circumstances occur where they will be late. Work with the tenant, but still hold them accountable. Give them a 3 day eviction notice early so that they can seek the help of a non-profit rent assistance company to help get them over the hump and keep them in their unit. 

    3) Do not waive the rent yourself because it is unfair to the other tenants who pay on time, point them in the direction of agencies who can help them. The apartment building is a collection of neighbors who live together and the landlord often acts as the arbiter. When one tenant does not pay the rent, they are harming their neighbors as much if not more than the landlord. It is socially responsible to make them move.

    4) Keep ads general and inclusive. Let the tenant decide they do not want the unit and weed themselves out.

    5) Make sure you qualify your tenants thoroughly. Especially on income. It is nice to help the tenant get a good place that is affordable however, do not set them up to fail. Make sure they can reasonably pay the rent, put food on the table, get to and from work, and have a little left over for discretionary income.

    6) Create community space. People need to interact with each other. The more they can know their neighbors the longer they will stay and better they will like the property.

    7) Stay out of your tenants personal lives.  You are just asking for trouble if  you get involved too much and it can get turned back on you.

    8) don't lock yourself into a specific rental term/contract language that prevents you from taking action. Limiting rental increases to 90 days notice or other potential changes or actions, limits your ability to manage effectively. Sometimes you may need flexibility in this language to remove a problem tenant who is effecting the whole community in a negative manner.

  • Saugerties, NY · Member since 2017 · 81 posts · 33 votes
    9y

    @Joe Splitrock - Thanks for your thorough critique!

    Sounds like you and @Thomas S. and @Chris Purcell feel similarly on a lot of these. I appreciate your feedback.

    To respond to your thoughts...

    2. I would argue that sometimes the problem is poor money management on the part of a tenant and sometimes it’s unanticipated and unfortunate circumstances (loss of a job, illness). I’m certainly not claiming that the former never happens, nor that it happens less than the latter. What I’m suggesting is that, as a policy, landlords offer tenants who “get into a jam” information about resources in their communities to help them through acute financial hardship in addition to executing the lease as-is (evicting when rent stops coming in). This way, tenants who fall into the “unexpected life circumstances” group get a little help (a tiny bit, really, as I’m not advocating that a landlord hold their tenant’s hand through this process, but simply provide information) figuring out how to stay in their home.

    I appreciate you sharing about your past experiences with this practice. Any additional thoughts on the above?

    3. “As far as stating all people are welcome to apply, isn’t that a given?” I believe the answer to this question is a resounding “no,” especially depending on where a unit is located and the political/racial/socioeconomic profile of that neighborhood or city. (For evidence of this, I recommend listening to a portion of Episode 512 of the This American Life podcast – skip to the 5 minute mark! https://www.thisamericanlife.org/radio-archives/episode/512/house-rules.) Plus, it’s such a little thing, really, to add an “all are welcome” message to a listing – it takes no time at all. So why not do it? I agree, by the way, that being clear about application/screening requirements, including background and credit checks, is good practice.

    4. Others have mentioned this, and you could be right – it may do no one any good to advertise a “class A” property at an org that works with section 8 tenants, for instance. However, if my rates comp out well (i.e. if they qualify as “market rates” for a particular neighborhood), I believe they may still qualify for section 8 rental assistance, even if they’re significantly higher than units in other neighborhoods? I’m not sure about that, though, as I’ve never been through the section 8 approval process in my city.

    5. I actually don’t do yard maintenance myself, save for the few times a year I visit my rental and want to get dirty (I love yard work!). I’m advocating for landlords to pay to have a professional take care of the yard. I believe this cost should be built into the rent. As I explained in my post, it took a long time for me to come around to this opinion, as I’ve had many tenants over the years express great enthusiasm for taking care of the yard, but it rarely works out. And when the yard looks ******, the whole neighborhood suffers. So I think the responsible thing to do, as a landlord, is to invest the resources to keep the yard looking nice regardless of tenant action/inaction.

    6. Great point – I can see how the wrong combination of neighbors and tenants could mean a lot of headache for the landlord. Good to set appropriate boundaries. And, perhaps sometimes, an initial meet-n-greet between tenants and neighbors could help to establish a direct line of communication between them (so the landlord doesn’t have to play middleman/woman too often)? Or would this feel like over-stepping to you? (I could see it being appreciated OR feeling awkward/unwanted by a tenant/neighbor.)

    7. You’re right – who knows if it will make people happy? But I know it would totally delight me, and I enjoy doing it, so I thought other landlords out there might, too. :)

    8. Just to be clear, I charge upfront move-in costs (first month’s rent and a security deposit). It’s last month’s rent that I allow tenants to spread out, and I do this because 1st month + security is already quite hefty in my area and want my rental to be accessible to people who perhaps don’t have a ton in savings (rent for my upper level unit is $2150, so with a $1000 security deposit and 1st and last month’s rent, move-in costs come to $5300!). It’s a balance between charging enough to make sure a tenant is serious about staying (and paying rent), but not charging so much that you become inaccessible to people who would otherwise make great tenants.

    Regarding what tenants want – I think you’re absolutely right! Maybe these should be added to my list. They seem more like “good landlord” practices (generally) than “socially responsible” landlord practices, though? What do you think?

  • Saugerties, NY · Member since 2017 · 81 posts · 33 votes
    9y

    @John Lenhart It’s great to read your thoughts – thanks for chiming in!

    I especially appreciate your comment on “not setting your tenant up to fail” (in terms of income requirements, etc.). I hadn’t thought about it from that perspective before. 

  • Investor · Philadelphia, PA · Member since 2010 · 739 posts · 372 votes
    9y

    @Megan S.

    Your OP reads:  3. When posting a vacancy, be explicit about who is welcome to apply.

    That's not saying that ALL are welcome to apply, that's saying that exclude in your advertising who is NOT allowed to apply.

  • Saugerties, NY · Member since 2017 · 81 posts · 33 votes
    9y

    @Alan DeRossett - Great tip about testing the water. I've been eyeing Newburgh, NY as a potential next investment spot and it's had some major water contamination issues in the past...

  • Investor · Thousand Oaks, CA · Member since 2017 · 306 posts · 123 votes
    9y

    I always write up the best offer and then make acceptance conditions include inspection pest and water testing sometimes Soil and Geo in some areas with expansive soils that might break slabs. On one House i bought at $160k  6 days before foreclosure over $40,000 of work was written up by inspectors so i got that money off in escrow to do the work.. Some areas on ground water have toxic levels of Aresnic and if a Tenant ever decides to sue could own your property.

  • Saugerties, NY · Member since 2017 · 81 posts · 33 votes
    9y

    @Chris Purcell - Here's an example of being explicit about who is welcome to apply:

    "People of all genders, sexual orientations, races, ages, income sources, religious and political affiliations are welcome to apply."

    This doesn't mean you can't also list your screening criteria and be explicit about who will be turned away (also a good idea).

  • Rental Property Investor · Cincinnati, OH · Member since 2017 · 258 posts · 207 votes
    9y

    @Megan S. one thing that is important is to list your screening criteria or rental criteria on your application. For example, our criteria states you must have gross income of 3x rent, and cant have a recent eviction (3 years) and cant have a violent crime of drug offense  in the last 10 years.

    This way the applicant can see what you are looking for before they waste the time to apply. 

    We use the time threshold on dealing with former felons because we feel it balances the interest and safety of others in the community with the limited chance of recidivism for the applicant (HUD has come around to this approach too). Just because someone did something dumb when they were 18 does not mean they are the same person at 40 as they were back then. Therefore, we will give someone a chance if they are far removed from a prior felony.

    The only question I have about your advertising criteria on who can be turned away, is that the only groups where you can actively advertise that you accept have to deal with senior or student housing. Outside of those 2 subgroups, you cant discriminate on age or familiar status. Is this what you mean in your advertising?

  • Saugerties, NY · Member since 2017 · 81 posts · 33 votes
    9y

    @John Lenhart - Yep, totally agree about providing screening criteria (see my post just above yours!).

    Re: advertising - I'm not 100% sure I understand your question, but I'm basically advocating for the inclusion of a standard "fair housing"/"we don't discriminate" statement. Yes, of course it should be obvious that I won't discriminate against you, but *in practice* illegal discrimination still happens all the time. So it's just a way of saying, explicitly, "I'm one of the good guys who will treat you fairly! If I wasn't, I wouldn't add this statement to my listing, seeing as how I'm not legally required to do so!" :)  

    Does that make sense?

  • Joe SplitrockPro Member
    Moderator
    Rental Property Investor · Sioux Falls, SD · Member since 2015 · 9k+ posts · 18k+ votes
    9y
    Originally posted by @Megan S.:

    @Joe Splitrock - Thanks for your thorough critique!

    Sounds like you and @Thomas S. and @Chris Purcell feel similarly on a lot of these. I appreciate your feedback.

    To respond to your thoughts...

    2. I would argue that sometimes the problem is poor money management on the part of a tenant and sometimes it’s unanticipated and unfortunate circumstances (loss of a job, illness). I’m certainly not claiming that the former never happens, nor that it happens less than the latter. What I’m suggesting is that, as a policy, landlords offer tenants who “get into a jam” information about resources in their communities to help them through acute financial hardship in addition to executing the lease as-is (evicting when rent stops coming in). This way, tenants who fall into the “unexpected life circumstances” group get a little help (a tiny bit, really, as I’m not advocating that a landlord hold their tenant’s hand through this process, but simply provide information) figuring out how to stay in their home.

    I appreciate you sharing about your past experiences with this practice. Any additional thoughts on the above?

    3. “As far as stating all people are welcome to apply, isn’t that a given?” I believe the answer to this question is a resounding “no,” especially depending on where a unit is located and the political/racial/socioeconomic profile of that neighborhood or city. (For evidence of this, I recommend listening to a portion of Episode 512 of the This American Life podcast – skip to the 5 minute mark! https://www.thisamericanlife.org/radio-archives/episode/512/house-rules.) Plus, it’s such a little thing, really, to add an “all are welcome” message to a listing – it takes no time at all. So why not do it? I agree, by the way, that being clear about application/screening requirements, including background and credit checks, is good practice.

    4. Others have mentioned this, and you could be right – it may do no one any good to advertise a “class A” property at an org that works with section 8 tenants, for instance. However, if my rates comp out well (i.e. if they qualify as “market rates” for a particular neighborhood), I believe they may still qualify for section 8 rental assistance, even if they’re significantly higher than units in other neighborhoods? I’m not sure about that, though, as I’ve never been through the section 8 approval process in my city.

    5. I actually don’t do yard maintenance myself, save for the few times a year I visit my rental and want to get dirty (I love yard work!). I’m advocating for landlords to pay to have a professional take care of the yard. I believe this cost should be built into the rent. As I explained in my post, it took a long time for me to come around to this opinion, as I’ve had many tenants over the years express great enthusiasm for taking care of the yard, but it rarely works out. And when the yard looks ******, the whole neighborhood suffers. So I think the responsible thing to do, as a landlord, is to invest the resources to keep the yard looking nice regardless of tenant action/inaction.

    6. Great point – I can see how the wrong combination of neighbors and tenants could mean a lot of headache for the landlord. Good to set appropriate boundaries. And, perhaps sometimes, an initial meet-n-greet between tenants and neighbors could help to establish a direct line of communication between them (so the landlord doesn’t have to play middleman/woman too often)? Or would this feel like over-stepping to you? (I could see it being appreciated OR feeling awkward/unwanted by a tenant/neighbor.)

    7. You’re right – who knows if it will make people happy? But I know it would totally delight me, and I enjoy doing it, so I thought other landlords out there might, too. :)

    8. Just to be clear, I charge upfront move-in costs (first month’s rent and a security deposit). It’s last month’s rent that I allow tenants to spread out, and I do this because 1st month + security is already quite hefty in my area and want my rental to be accessible to people who perhaps don’t have a ton in savings (rent for my upper level unit is $2150, so with a $1000 security deposit and 1st and last month’s rent, move-in costs come to $5300!). It’s a balance between charging enough to make sure a tenant is serious about staying (and paying rent), but not charging so much that you become inaccessible to people who would otherwise make great tenants.

    Regarding what tenants want – I think you’re absolutely right! Maybe these should be added to my list. They seem more like “good landlord” practices (generally) than “socially responsible” landlord practices, though? What do you think?

     2. I never speak in absolutes because there are always exceptions which is why I said most. That being said, at least 90% of the tenants who have trouble paying rent are repeat offenders with horrible money management skills. Responsible tenants have an emergency fund or some way to come up with one months rent. I have been very kind to people only to have them stick it to me. One single mom landed in jail for unpaid parking tickets. I had just collected her rent that morning. I actually went down to the jail and used her rent money to bail her out. I did that so she could keep her job and so that her kids would have their mom. A year later she trashed the apartment and moved out in the middle of the night with no notice. She was one of the people I referred to programs to help her. I saw her years later and her now teen daughter had a baby. The cycle continues.

    3. My point was that it is a given to me that anyone can apply and I don't say anything that would turn a protected class away. I would argue that money is the number one discriminating factor in rental properties. When you say "all are welcome", realistically low income people are shut out of your property at $5300 worth of move-in expenses $2150 monthly rent. 

    Interesting quote from the link, "Where you live is important. It can dictate quality of schools and hospitals, as well as things like cancer rates, unemployment, or whether the city repairs roads in your neighborhood." 

    Their logic is flawed, because it is not where you live that determines these things. It is like saying if you live in jail that it makes you a criminal. Where you live is a direct effect of choices. Quality of schools is directly linked to the parents of the kids who attend. The reason schools in affluent neighborhoods have higher test scores is because parents are more involved. Parents work with their kids outside school and set higher expectations. Cancer rates are very much related to lifestyle decisions. Many people in poor neighborhoods are drinking, smoking and make other poor dietary choices. It is the same series of bad choice that lands them in a bad neighborhood. Even if they move to a good neighborhood, they will still make the same bad choices. Unemployment limits your housing options and determines where you live. As far as road repair, that is related to home values and taxes. Less tax money makes it harder to upkeep and repair. I will concede that you can be pulled up or down by the environment you live in, but that is not the main factor. 

    4. Section 8 puts more restrictions on the landlord. I have mostly B+ properties and the rent is too high at all of them to meet Section 8 requirements. I don't think any class A property would be financially in reach of Section 8. If it was, I would question why our tax money is going to rent the nicest property, when a working person has to live in a B or C. Would your property qualify for Section 8 at $2150 per month?

    5. Good point, if the tenant doesn't upkeep the yard then the landlord must.

    6. I encourage tenants to walk over to the neighbors and introduce themselves. I think it could be a little condescending to act as a mediator for adults. I know that is not your intent, but it could be seen that way. Set a precedence that they should work together and you are only there for extreme situations.

    8. Thanks for clarifying, that sounds reasonable. We don't generally collect last months rent in my area and rents are lower. By they way, based on your rents, I would argue not "all are welcome". 

  • Saugerties, NY · Member since 2017 · 81 posts · 33 votes
    9y

    @Joe Splitrock - 

    I think I'll refrain from responding to many of your comments, but I will say that I totally, 100% agree that my property is not "welcome to all" in the sense that it is not accessible to those who can't afford it (i.e. those with low income).

  • Rental Property Investor · Cincinnati, OH · Member since 2017 · 258 posts · 207 votes
    9y

    @Megan S. I know if you become a member of your local apartment association or REIA they often offer courses or point you in the direction of trainings where you can be certified as a fair housing provider. I know you probably are already up on the rules but as a marketing tool it is nice to be able to place the fair housing logo on your advertising.

  • Saugerties, NY · Member since 2017 · 81 posts · 33 votes
    9y
    Thanks, John Lenhart !
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