Renting to Homeless Tenants

Jon Fesmire | Jul 12, 2017 @ 10:06 AM

In self storage, we generally expect tenants in certain situations. Some are in the process of moving and use their unit as a sort of staging area. Others are simply trying to make more room in their homes by storing things they still want but don’t use often, or perhaps using their units as a place to store their off-season clothes. Depending on what the facilities allow, some may use the space as offices, gyms, or for band practice.

Most of the time, we expect our tenants to have a residence. This gives us a place to mail their bills and, if they don’t pay for a few months, to send them the series of notices required, urging them to pay, before we put their units up for auction.

Levels of Homelessness

By definition, homeless people don’t have homes. However, in many cases, that’s not quite the case.

In America, homelessness covers several possibilities. The first is absolute homelessness, in which the person sleeps somewhere outside or in a car. The second is homeless but staying in a shelter. For individual adults, that generally means a place to sleep, eat meals, and receive mail. The third is a family shelter, for adults with children, and that means an actual place to live, generally for about six months, while the adult or adults save money and work on getting into permanent housing.

Fourth, also for families with children, is transitional housing. Now, we’re in an area that doesn’t seem like homelessness at all. The family lives in an actual house or apartment and pays a significantly reduced rent for six months to a year, letting them save enough to move into permanent housing. Fifth is rapid-rehousing, which can be the final step out of homelessness. This is where an agency helps a family with the first few months’ worth of rent, and perhaps some furniture, and after that, the family is able to pay full rent and is no longer homeless at all.

The Homeless Conundrum

Naturally, you want to rent to people who are going to be good tenants. You may wonder if your homeless renters will follow the rules, and that’s understandable. If they don’t have somewhere to stay, like a shelter, you may fear they’ll sleep in their units. You may also fear that they’ll default on payments and that you won’t be able to contact them.

Just because someone is homeless doesn’t mean they won’t follow the rules. People fall into homelessness for many reasons, from medical bills they can’t pay to bad divorces. They’ll often have belongings that they need to put somewhere, like various records, photo albums, and family heirlooms that mean a lot to them.

Self storage facilities can be part of the solution to help homeless people get back on their feet.

Of course, you need to be able to contact them via mail. What to do?

Gathering Information

When anyone wants to rent a unit, ask for proof of address and for an emergency contact address. If you require this from everyone, there’s no problem requiring it from homeless people as well. If someone does not have an address but has that emergency contact address, which you can verify, that should be enough.

Many will use the address of the shelter where they’re staying as their home address. In fact, shelters encourage this. Accept that as well.

Explain the basics of what happens when renters don’t pay for a certain amount of time to every tenant. That way, they’ll know that their items might go on auction if they don’t pay, and it should encourage them to make their monthly payments.

You May Be Surprised

Homelessness does not equal irresponsibility. Yes, some homeless people may have gotten there by not running their lives well. Others may have simply fallen on hard times.

Rent the unit, be friendly, and hold your homeless tenants to the rules as you would anyone else. If they’re sleeping in their units, evict them. If they don’t pay, follow the correct procedures and contact them at the addresses they’ve given you. Basically, treat them as you would any other adult renting from your facility.

You’ll likely find that most of them pay their rent on time. When a formerly homeless tenant gets into permanent housing, they’ll be grateful to you for renting to them. You can always help the homeless in other ways as well, by donating clothing and money to shelters. However, the way you treat them in person will truly show that you and your facility have character.