Rentals Specifically for Felons

2 Replies

I am a REI newbie and have grand ideas for my future empire (I know I am years away from something substantial) But I am interested in a FUTURE side project that probably has a lot of problems. A family member of mine is a convicted felon (served her time and is clean) and has a really hard time finding somewhere to live. She is considering trying to start a property management company that allows felons to rent if they can show they have been clean for a year/other requirements.

Eventually I think I would like to be able to help and own some properties her company could manage. I realize business with family members can be...rough...  Would setting up a non profit be a direction to go? Does anyone know of any government grants that could help with this? Is this a crazy idea all together? 

Thank you in advance for your thoughts!

I have an attorney friend (primarily a defense attorney) who is also heavily involved in REI. This concept isn't something he's done yet, but it is something he's talked about. Unfortunately, I don't know any specific details. But he is a master at leveraging government programs and grants for his real estate ventures. I would swear he's mentioned something like that, but I think it was more related to halfway houses.

FWIW, he's smart, well educated, and very accomplished.  And he doesn't think it's a crazy idea.

I know it's rough out there for people with a criminal past.  It's harder to find jobs and harder to find housing.  And that's not necessarily fair to people who have served their time.  And, while I might be sympathetic with that, I don't rent to felons either.  At least not those where their felony is related to a violent crime.  Of course not always, but they are generally going to be people with problems and having tenants with problems makes my life a lot harder.  So why would I do that?  I wouldn't, so I don't.  Some of the problems there can be is income stability.  Or just the fact that people who have spent an extensive time in prison, especially if it was recent, have a higher chance of not knowing even the basics of how to take care of a house or their finances.  I occasionally have enough trouble with that for tenants who have never gone to prison.

On a different note, I generally wouldn't recommend doing extensive business with family members or good friends. Or, if you do, just realize it could potentially lead to the end of the relationship and bad feelings if things don't work out for both parties.

I also wouldn't recommend that you start out your real estate journey in the niche of renting to felons. Being a landlord can be hard enough. Don't jump into the deep end on your first go-round. Experience and enjoy some of the shock and horror first of what typical tenants do. Until you make an exclamation of, "OH.MY.GOD! Who DOES that! How can people live this way?", you're not ready yet, lol. Like destroying your countertop and acrylic sink because they didn't realize or care that they should have used a cutting board. Or make holes in the kitchen wall so they have a place to put their incense sticks. That's just a recent sample for you from a vacancy I had last month.

@Jennifer T.   Thank you for the advice! This is definitely not something I would want to jump into anytime soon, I know I still have so much to learn this was more of a idea I'd like to have in the back of my head for awhile. Sounds like I need to find myself an attorney friend for the future though!