Get out of my property!

The other day I heard a pretty chilling story from an owner of income property and it is forcing him to rethink his entire strategy of income property as a way to accumulate wealth. He has lost, not earned, a lot of money.

He had rented one of his income properties to an individual. That person was the only signed tenant on the property. Another person was illegally offered residency, unbeknownst to the landlord, and when the lease terminated, the spare tenant refused to evacuate. The owner asked him to leave and when he wouldn't, threw his possessions out the door. That "tenant" had a social worker who said he had to be given notice of eviction, despite the lack of a lease with his signature. A court battle ensued, and after many months, the "tenant" was evicted. Do I need to mention that this person was not paying rent or utilities? Do I need to mention that the property was in shambles? I'm being kind in saying "shambles."

This experience so shocked and disillusioned the landlord that he is putting his income properties on the block (lucky me...), after which he will put his own residence up for sale and invest in a larger property for his family. He understands the value of real estate and reasons that if hard times do arrive, at least he can live in his investment and weather any storm that arrives via assessments, if he hasn't overestimated his financial situation. Flips are in the immediate future and he is well-equipped by employment to do those very, very effectively. I look forward to a prosperous relationship.

While this situation is extreme - there was not even a lease for the individual in question - a similar dilemma exists for many landlords. At what point does the landlord decide to evict when a previously good tenant falls on hard times? This is Ann Arbor, Michigan I am talking about and the auto industry woes have rippled through the rest of the economy, presenting challenges for the landlord who is soft-hearted but who must make hard business decisions. Michigan was hit long ago with the foreclosure crisis but Ann Arbor has held out, sizeable household incomes and savings presumably being key.

I am sympathetic to housing and other services for the homeless, too numerous to mention here. I FULLY support the goals of Habitat for Humanity in its efforts to provide affordable housing to deserving individuals. (I have hammered a few roof shingles on habitat homes myself and should do it a lot more often...) I have to question the decisions of the courts as described above, despite what must be the law. I'm thinking it is lack of community resources for housing people in these situations. I want to believe it is misunderstandings about how many people really need these services, how many people are sleeping on couches of friends and relatives until they can get their economic situation in control. What if there are no friends or relatives?

I suspect though, it is really a lack of commitment from the "haves" for the "have-nots". The "haves" are too busy to notice what the "have-nots" need. Or are too judgemental in why the needy are in the situation they are in. I don't remember the percentage, but the people in this nation who are one or two paychecks away from housing calamity is unbelievable. It could be so many of us. In one of the weathiest countries in the world, we do not have a reliable safety net for homelessness. I know Congress has been addressing housing issues of late, in this election year, but for many it may be too little too late. This crisis has been ever-present.

I don't know what the details were of the individual mentioned above; I don't know that the landlord knew either. All I know is this - when money is spent to invest in income property and leases are in place, and the terms of the lease are violated, the burden should not fall on the private property owners. A compassionate society should have a system in place to quickly fill the housing void when eviction becomes necessary.

Regarding guaranteed return, if we were talking stocks here, in this market, income property would be a stock for the young - high risk. Those nearing retirement need not apply. This is not stocks though, it is housing. Let's make it fair for landlords and safe for at-risk tenants. Everyone needs somewhere to live.