Advertising a vacancy can be like placing a personal ad, i.e. “Seeking: responsible and friendly tenant with sound financials. Interests must include cleaning and landscaping.” For many property managers, finding the perfect tenant with whom to entrust their property is the most stressful part of the job. Finding the perfect match is difficult, and while vacancies are a huge financial liability, so are many potential tenants.
As a property manager, you do not want to invest poorly, so to speak, in the wrong person, but financial needs can outweigh the better judgment of even the savviest of property managers. However, some property managers are finding better ways to compromise.
According to a recent article in The Independent, in the United Kingdom, rather than filling vacancies with the first person to apply, property managers are finding tenants while serving their communities by setting up charities that help the homeless find places to live. Through the charity Broadway’s Real Lettings, managers are renting their properties at a reduced rate to people who might otherwise not be able to secure housing.
At first glance, the plan seems ludicrous. By and large, the homeless population is not known for having excellent credit or being reliable and consistent with payments. However, by leasing apartments to the homeless, landlords keep vacancy rates low and have a steady stream of income. While the rents charged to these tenants are lower, they do not fall significantly below the standard market value.
Additionally, the lease terms tend to be stricter than those in a typical renter agreement. The property must be well maintained and cared for, and no changes may be made to the property without landlord approval. As any property manager that has had to replace horribly stained carpets knows, the maintenance that must be done in between tenants can be overwhelming. These tenants tend to take great pride in their homes , minimizing those headaches. Furthermore, the retention rates for those involved has been staggering. When the terms of their leases are up, roughly 95% of formerly homeless tenants renew. This makes the headaches that go with advertising practically a non-issue.
Most importantly, the program fulfills a specific social need. It can be difficult for those suffering the plight of homelessness to better their lives. Landing a job without a home address is virtually impossible, and potential employers are often prejudiced against the homeless. Having a place to call home gives them a leg up, and is a huge help while seeking new opportunities. Moreover, staying off the streets keeps people from the dangers of drugs, alcohol, and crime, better enabling them to truly move forward with their lives and shake off whatever issues led to their homelessness. Second chances are all too rare, and by working together with the formerly homeless, these landlords are giving people more than just a roof.
Property managers, keep looking for that elusive perfect tenant, but be sure that you open your eyes to every option. The best chance for your success might be in the last place you look.