Recenty I've begun investing in a lower income area (row homes under $35K for three bed, two bath) with some neighborhoods better to buy in, others better to avoid like most places. Has anyone given letters to new tenants (we have a property manager), with basic budget resources (ala a Dave Ramsey), with the discaimer we are not financial advisors and reviewed by our attorney. Goal would be to create a win-win of making tenants aware of solid fiscal practices (w/o being condescending) for a better life for themselves and indirectly also hopefully helping them plan to have money at the beginning of the month for us.
Thanks for the insights!
I think it would be a good idea if the tenants follow your advice but the chances the tenants will listen is very slim.
I think you'd be wasting your time. Plus, some may view it as condescending as they may not strive to be as monetarily successful as you or me.
I'd keep your relationship strictly to rental property issues.
I think you'd be wasting your time and possibly opening yourself up to unwanted critique from your tenants. To share something such as Dave Ramsey concepts you just have to live it and help those who come to you asking, "how do you do that".
Wow - if I were the tenant-to-be & were handed that type of information, I'd be very offended. How I handle my money is my business - if I make the rent, it's none of your concern how I do it.
I'm their landlord, not their mama.
Agree with Mike M that low income tenants do not have the same values as middle class. There is not a motivation to move beyond spending money as soon as it appears, that is the culture they have grown up in.
I've had applicants scream at me when I've declined them because they don't meet my income criteria. Honestly, I think they may truly have been able to make ends meet; low income have a huge capacity to stretch a dollar. The problem comes in when they have some kind of life circumstance hit them and they don't have any reserves or friends/relatives with the reserves to bail them out.
A lot of social services require recipients to attend basic financial training sessions. I'd guess many have gotten some exposure, but it doesn't click because it is so foreign.
This blog post may be of interest:
Most of my tenants see me monthly as I pick up the rent. I also do different projects as opportunities present themselves. When I do larger projects I let the tenants know what they cost. If I am over cleaning the gutters or something like that I usually let them know what I have been doing lately. They know full well that I work more than anyone else they meet. With that background I have offered and given the Dave Ramsey book "total money makeover" for certain tenants to read as the opportunity presents itself. I always present it as this is something that has benefited me and feel free to read it if you would like. If you don't just return it and trust me you won't hurt my feelings. A couple of tenants really seemed to enjoy it and one was just a shot in the dark and was soon out anyway... Another way I present the book is similar to the Bible. My wife and I have both read the total money makeover. We know what it says and know the principles. We know that we don't follow them exactly and know the reasons why. It is a baseline that we can both start from when having a discussion on it.
At the end of the day you could present it as a gift at movein or renewal. Just be aware that it might not be recieved as you intend and don't expect it to change their lives but be happy if it does...
I like the idea of including a budget worksheet in your move-in documents. If it works for 1 out of 100 then I would think it is worth it.
Free eBook from BiggerPockets!
Join BiggerPockets and get The Ultimate Beginner's Guide to Real Estate Investing for FREE - read by more than 100,000 people - AND get exclusive real estate investing tips, tricks and techniques delivered straight to your inbox twice weekly!
- Actionable advice for getting started,
- Discover the 10 Most Lucrative Real Estate Niches,
- Learn how to get started with or without money,
- Explore Real-Life Strategies for Building Wealth,
- And a LOT more.
Sign up below to download the eBook for FREE today!
We hate spam just as much as you
Create Lasting Wealth Through Real Estate
Join the millions of people achieving financial freedom through the power of real estate investing