Rent Checks and the Plight of the Poor
“History doesn’t repeat itself – at best it sometimes rhymes.” — Mark Twain
I own a couple of rental properties and have given candid opinions about using real estate as part of our retirement plan. At the moment, I’m having trouble with one of my tenants and I’m at the point of slapping her with fines for not keeping the lawn mowed and weeds pulled on the property.
I’m being fined by the homeowners association so in reality I’m just passing along these citations to her. She knew the rules when she moved in: mow or pay someone to mow. I know little about this woman or her situation since my property manager handles most of the interaction. I look at this as just business and nothing personal.
Anyway all this got me thinking about the landlord / tenant relationship. On one hand, I’ve preached that home ownership is the cornerstone to wealth and yet at the same time, I rely on people’s intrinsic misfortune in order to better my pocketbook (for whatever reason they can’t afford to buy a home and are forever stuck in the cycle of renting).
Jeanine is reading Howard Zinn’s book, A People’s History of the United States and last night as she was reading the chapter about persons of mean and vile condition, she said we really haven’t changed much since the lives of our Founding Fathers.
Zinn noted a study about servants in seventeenth-century Maryland. He writes, “The first batches of servants became landowners and politically active in the colony, but by the second half of the century more than half the servants, even after ten years of freedom, remained landless. Servants became tenants, providing cheap labor for the large planters both during and after their servitude.”
He argues that class lines hardened throughout this period of our country and that the distinction between rich and poor became sharper. He continues, “In the Carolinas… rich speculators seized half a million acres for themselves, monopolizing the good farming land near the coast. Poor people, desperate for land, squatted on bits of farmland and they fought all through the pre-Revolutionary period against the landlords’ attempts to collect rent.”
“The colonies grew fast in the 1700s. Through all that growth, the upper class was getting most of the benefits and monopolized political power. As Boston grew, from 1687 to 1770, the percentage of adult males who were poor, perhaps rented a room, or slept in the back of a tavern, owned no property, doubled from 14 percent of the adult males to 29 percent. And loss of property meant loss of voting rights.”
I guess a few things have changed since then, but there’s still a great divide between the rich and the poor in this country. There’s an interesting article in Times Herald-Record by John Doherty. He writes, “It’s eviction day in the city, and Michael Acevedo Sr. straps on his gun and points his truck toward Dubois Street. This morning, as he gets ready to supervise lock-outs at two apartments, Acevedo talks about the city’s poor people.”
“After 30 years here as a landlord, a property manager and now the city marshal, Acevedo sees himself as an expert on the subject. He’s had renters stiff him on their $50 share of Department of Social Services-subsidized rent and then bust pipes and call the building department to complain when he threatened eviction.”
“He’s evicted people who leave behind DVD players and big-screen television sets and food in the fridge and medicine in the cupboard: There’ll be more handouts down the road. He’s seen tenants who punch holes in walls and stuff the dirty diapers inside.”
“The smell doesn’t seem to bother them,” he says with a shrug.
“Acevedo doesn’t live in Newburgh. Never has. And he does not, he admits, have a very sympathetic view of the city’s chronically impoverished.” Read on about Newburgh where “70 percent of the 10,000 properties are rental homes or apartment buildings, a higher percentage by far than anywhere else in Orange County.”
Sounds a bit like life in the colonies. This brings me to the ethical dilemma of the day… I’m a landlord. I own property to improve my financial lot in life but at the same time I’m banking on the struggle of others.
How do we balance it as “just business” verses viewing tenants as real people with real struggles? I have no idea why my tenant can’t keep up with mowing her lawn. Have I cared enough to inquire about the reason? Or do I just shoot off another pesky email to my property manager telling him to make sure she takes care of it within ten days?
Every month I become wealthier because of those rent checks, but what can I be doing in return to help the plight of the poor. I don’t have answers today. I’m just thinking out loud.
We too had the same plights as you.
When my partner Susan & I met, we had each given up the idea of ever finding the right woman to settle down with- so we had each bought small (teeny tiny, nearly pod sized) homes on our own. When we married, we lived in my house for a year while we renovated her home (it was a dirt cheap HUD home). Eventually, we decided to move into hers when we began to consider children, since her home had 3 bedrooms and mine only had two.
Anyhow, we had more buildings than we physically needed. We put my house on the market- in a real estate market glutted with homes. I’ve had to laugh not to cry in seeing the financial gurus wax poetic about flipping homes or renting- ’cause very few are making that work in my neck of the woods! So we decided to rent- two mortgages every month was a lot of scratch to watch flying out the window. We had one very good tenant who lived in my house for 5 years- but unfortunately during this time, the neighborhood my house was in took terrible turns- lots of drug dealing, violence, and gangs. The good tenant we had gave up on living in my house the night she found someone in her bedroom when she came home from work early. Who could blame her for wanting to leave?
After that- it was one nightmare after the next. I could tell you plenty about what a house looks like after bad renters. I sank so much in that building to just keep it up to codes! I would try to rent but just didn’t have the energy to take care of matters as needed- what with working full time and co-parenting in a rapidly growing family. The last straw was when a tenant up and left in the middle of the night, after being a month & a half behind in rent. We put the house back on the market after spending as much as we could to make it presentable. I took huge losses and wiped out a large and timely inheritance from a great uncle and just got rid of it last December.
The only alternative I have is for you to raise the rent to include the cost of the lawnwork/upkeep and sign contracts with a reputable lawn care company for weekly care.
The main thing we, um, “underfinanced” want is a fair deal! I live in a rent-controlled building for just that reason. Checking out what the local government posts as market rates for units and adhering to those prices is one way to make a change.
Who says renters are *always* the struggling poor? What if they simple move often and want to rent it? Or, they find it cheaper to rent instead of having to upkeep a larger house? Sure, plenty can’t afford to buy homes– but that doesn’t mean everyone. Renting your properties is fine. If someone wants to rent, they will. Otherwise, they’ll find a way to buy their own homes.
Very thoughtful. I must admit, I’d never really thought of landlording that deeply, but I’m glad you’ve brought it to my attention.
I recall reading a book once, Landlording on Autopilot, that talks about giving an annual, catered party for your tenants and contractors. It’s not much, but maybe it would help you sleep at night! 🙂
I can’t believe I missed seeing this post until now, but I’m very glad to hear your thoughts about this. I am not considering buying a rental property as an investment, but I am considering renting out my primary home for a year or two while I live elsewhere. I’ve been trying to figure out how to do this ethically. I’ve been considering some kind of equity share arrangement, but haven’t quite worked out the kinks yet.