The disconnect in Turnkey Investing Today

In the world of Turnkey Real Estate it seems that we as investors have a tendency to forget that our investment has a very human side to it. Has the investment in rental properties become so opaque and commoditized that we as investors have lost sight of the human being living in our "investment"? Sound scathingly agressive? Perhaps. 

It's been some months since I last posted and during that time I have seen some of the darkest depths of what humans can do to each other without ever considering what they have done. As rental properties shifted from a local landlords owning properties to a billion dollar industry, the emotional connection with the tenant was lost. This loss between tenant and landlord has created catastrophic consequences for both sides. When those of lesser means are subjected to un-inhabitable living conditions without a second thought it brings the stratification of social classes into plain site.

A recent event took place where an investor in California was absolutely shocked at the events that took place without them knowing anything about the situation. The investor purchased a turnkey property, received evidence of a quality property and a happy tenant. For months the investor followed the standard practice of letting the property manager handle the day to day. Then one day the rent checks stopped coming and the reality of an atrocity was realized. Not only were the tenants living in homes that should have been condemened but the properties themselves were never fully renovated as agreed upon. The seller of the property and then the property manager had subjected the tenants to homes with sewage leaking, holes in the floor that rats crawled through and much more. Not only were the tenants living in squalid conditions but the properties required tens of thousands of dollars in repairs to make them livable.

Did the investor have fault in the situation? As a investor, one should oversee an investment above and beyond simply trusting the seller and property manager from thousands of miles away. But many investors are trusting and believe that not only are their interest being protected but that no one would subject another human to an environment of such shamefull dissaray.

I have posted many times about due diligence in choosing a seller and property manager. These suggestions were oriented toward protecting your investment. This time, I think the due diligence should be on making sure we are doing are part as ethical investors to make sure that no one should have to live in a slum. Take time occasionaly to contact the tenant, make sure they are being taken care of by the property manager. Let them know that they are more than a "Cash Flow".

Many, many sellers, property managers and investors maintain wonderful living conditions and quality properties that make for profitable investments. This vast majority understands the principles of treating humans as humans... I just hope that we as investors keep our eyes wide open and always remember that at the end of the day, our investment is someones home and to an extent a life.