Bigger Pockets -
I'm hoping you can help me out. My wife and I recently finished renovating a duplex in Minneapolis and are now stuck trying to find renters at the best time of the year. :-) We are being approached by individuals who lead group homes for disabled adults. They informed me that the individuals living in the unit would be unrelated and have nursing supervision 24 hours a day. The property is Zoned R2B (Two Family District - Low Density) and understand the city will allow Housing with Services to occupy the unit.
I'm extremely skeptical of this because the people approaching me don't have a website, are not providing information about their operation, and I know nothing about group homes.
Has anyone had experience with Group Homes (Housing with Services). Any guidance for for us on how to approach?
Appreciate any and all help.
@Allen Lemay it sounds like your instincts are correct. Your due diligence should be on them. I’m not sure they need a web site but they need to know what they are doing. They should have a business that is licensed, insurance, and you should be able to verify them or walk away.
If you can verify that this is a legitimate endeavor, it may be worth your time. The rent will be all but guaranteed, probably by the state. The major risk would be that you sign a contract/lease with them, and then they come after you to make necessary adjustments to the property in order to comply with certain ADA requirements. That could be as simple as installing a grab bar here or there, but could be as significant as putting in ramps and widening doorways.
@Allen Lemay ask to see their insurance and do a walkthrough with them at another property.
@Allen Lemay 6 individuals and under are protected by state law over local zoning laws. 7-16 require a conditional use CUP.
We have 3 adult family homes and have had great success. Some changes needed to be made like handrails , entrance ramps, and wide doorways. Ask for 30-50% more for rent cause damage to walls and floor is likely. Also write in lease their company pays for damage to these also.
@Allen Lemay do not consider it unless you will receive a substantial premium and a very large damage deposit. You will have a lot more wear and tear on the property as you will have people living there 24/7 and staff at all times. I recently purchased a group home and EVERYTHING needs to be replaced. Flooring, trim, doors, etc.
I have run into a couple people who have been asked to rent as a group home lately, the other two were not permitted uses in the city. If you consider something like this the first step is to call the city to make sure you are OK doing it.
@Allen Lemay I don't know about this particular company but renting to companies can be a very good deal. I rent to 7 different companies. There are pros and cons. The rent always gets paid in full and on time and no vacancy/turn over. They can be rough on the place you just have to have a good lease and keep an eye on the property. You have to allow reasonable accommodations for disabilities but you don't have to pay for those and they have to restore the property when they move out if you want them to. ie. remove a ramp.