Overcoming a felony conviction can be a really hard thing for people to overcome. Finding a job is no easy task and finding a place that will sign a lease agreement with you can be equally daunting.
If you are a landlord does it make sense to sign a lease agreement with a convicted felon?
Well, it all depends…
It does present a rather unique opportunity to cater to a niche of hungry and often overlooked market of renters.
Over 12,000,000 American citizens have been convicted of a felony. Additionally, over 600,000 Americans who have been convicted of a felony are going to be released from prison each year. This constitutes almost 8% of the working class population. Where do all of these people end up?
Without the appropriate resources at their disposal and no one to turn to for rentals, nearly ten percent of those released from prison will become homeless.
A landlord who sees the potential and has an open heart could very easily tap into this market and have a fantastic group of prospective renters at their disposal. However, going down this road obviously presents its own set of risks.
There is one institution that is doing something about this situation. The Corporation for Supportive Housing understands the risk and is working to ensure former inmates and felons can locate an understanding housing environment that will assist in keeping them off the streets. If former inmates do not get this help, a large percentage of them eventually relapse and end up back in prison completing another vicious cycle.
The Housing Authority of Utah County assists with a rent voucher program providing vouchers for close to 1000 households. The HAUC caters to people that were formerly homeless and whose income is below poverty level. The intention of this service is to get former inmates off the streets, to help them find their footing and to provide them with a stable home.
Utah’s Food and Care Coalition plans to build thirty-seven units of housing they are referring to as “transitional housing”. This will cater to anyone suffering from addiction or mental disorders. If you are a resident of transitional housing, typically you receive free educational workshops, job training and placement and often times substance abuse counseling.
Now that more and more of these types of programs are becoming available nation-wide, investors that are interested would have additional support at the ready if they choose to serve this clientele.
There is a catch…
Just because you may own low-income housing, it doesn’t necessitate that you will get help from these types of programs. And even though if you owned a business and hired an ex-felon, you would receive a tax break, the same does not hold true for signing a lease agreement with one. If you are a property investor, you have to know these risks going in.
On the converse, the rewards may be worth it for certain investors…
They would have a constant pool of willing renters to sign a lease agreement with and they would bask in the satisfaction of knowing they helped someone get back up on their feet while contributing to their community at the same time.
Stirling Gardner (The Hollywood Landlord) is a writer and property management expert.