Renting to "subprime" renters


I really need help from you guys who have experience. My wife and I own a duplex with 2 bed rooms and 2 baths on each side. We met with a couple with similar property and they advised us to rent it to subprime renters; recent released criminals, mentally retarded, people because government pay their bills. We will have to furnish the property and 2 people can occupy a room (2 beds) therefore 8 people in the whole property. We tour this couple property and met with these renters, they look scary but they (our couple friends)say nothing to worry about because they have been doing it for 3 years. They claim to be making a profit of $950 every month after all expense and mortgage have been taken care of and in the process of buying a 6-plex for the same purpose.

My question is this, is there somebody on this forum that is doing this or have done it before? If yes, can you give us some advice because I am kind of scare even though the money is good. We live in TX.


Make sure the neighbors to your rental can’t find you, because they are going to be mighty pissed off at you.

Your friends have their heads stuffed up where it is dark if they think their parolee tenants aren’t capable of being really dangerous and / or destructive.

Well this is a good one…lol
I have a few boarding houses and YES they are profitable… NO Question!!!

But Unless you are ready to step up to HIGH Maintance Investment then DONT do it…

Mental health people are the best!!!, jail birds have personality conficts, and so on…

if you do this you will have to be at the property 2 times a week and talk to every one and make sure they are alright…
Also you have to be a Great people person this is not for everyone…
PLUS you NEED to be a Hard ass!!!
Be very up front, tell them up front you will kick there @ss if they wreck your property, I have no problem telling my guys that rent rooms “If you Damage my houses and screw me for rent, I will Knock your fricken teeth out”…
If you are not preparred to do this, you better pass and concentrat on Rent to owns…

****I can not stress enough if you think its easy and it will work itself out by itself, You will get your &ss Whiped!!!


Hi Mattshingdo001,

I am glad to know that you have some experience doing this. Thanks for the piece of advice. I just don’t want to do stuff that I may regret later. If you don’t mind can you PM me on answers to the following questions: :banghead

  1. where to get the boarders
  2. any license needed from the government?
  3. are we liable if anything happens to them?
  4. reporting the “profit” to the IRS

I will appreciate your response. Thanks


What you’re talking about is “special needs housing”. This type of housing is usually a COMPLETELY FURNISHED rental, in which the owner provided EVERYTHING (even toilet paper, cable tv, all utilities, phone, etc. The gross rents are significantly higher, but the expenses are significantly higher too. Many of these properties will have an in-house caregiver, or at least one that is there so many hours per day.

I have a friend who has several special needs rentals. As the utility bills have exploded the past couple of years, he has lost a lot of money on these rentals. Special needs tenants don’t have any problem opening the windows in January if they are a little too warm!!!

An additional consideration is the law in your area. Many areas have laws regarding the maximum number of unrelated people that can live in a unit. I am somewhat suprised that your friend claims to be putting 2 people in each bedroom. That sounds iffy to me.

Mattshingdo gave you TERRIBLE ADVICE! Threatening your tenants with physical violence will only result in YOU getting in legal trouble. If you’re going to be in the rental business for the long term, you can not afford to act in such a reckless and irresponsible manner. What do you think will happen when you end up in court explaining why you are threatening to ‘knock the fricken teeth out’ of a mentally ill tenant?

The bottom line is that YOU have got a lot more work to do. You need to learn the law for your area. You need to determine the market for this kind of rental in your area. You need to understand how rising prices (especially energy prices) will affect your bottom line. You need to understand the risks of renting to special needs tenants. It will be your business and you need to do whatever it takes to understand the issues.

Good Luck,


“Mr. I dont ever do lease option be cause i have now idea what the heck i am doing ,( Yes go be a buy and hold sucker)”…
I may not tell a developmentally Delayed individual that i will hurt them, I was referring to the X-con’s… But either way, Newbies need to understand that they need to be up front… Maybe be not quite that way but I am sure you get my point…
Be Bold, Be honest, Be smart, Be Up Front, Be Loud!!!
This Aproach I have found is the most proactive…

Hi all,

I really appreciate your advises and I will be very cautious threading this line, I just don’t want to get into trouble with the law especially when dealing with retards and ex-convicts. :banghead

High energy bills and maintenance cost may eventually erode all the potential profit, I will think about this seriously.

Thanks all.

Mr. I dont ever do lease option be cause i have now idea what the heck i am doing ,( Yes go be a buy and hold sucker

What is it with the childish name calling and insults? I guess it goes right along with threatening your tenants with physical violence. At any rate, you won’t gain much credibility here (or in this business) with this silliness. If you have anything of substance to contribute, that’s fine. However, you’re not helping yourself with all the childish behavior.


What I am curious about is how many people’s teeth you’ve knocked out? How well did that go over? How many of his/her buddies were there when you went to let them know what is up? How many of his/her buddies came to hunt you down once you told the tenant that? What is your physical structure? Any special teeth-knocking-out skills or training? How many late rents have you had? How many knock-teeth-out tenants do you currently have? How many total knock-teeth-out tenants have you had? What is your turn-over rate?

No, I’m not asking these questions to be sarcastic. I am genuinely interested. I pride myself (sometimes) on being the world’s biggest @sshole, so I can see myself actually telling some risky tenants similar things. As soon as I acquire some teeth-knocking out skills. :evil :cool



If you’re a medical doctor, I could see how this could work out well. You could beat them up to get your rent and then charge them to treat their wounds! Maybe Matshindo is on to something!


Be a lawsuit waiting to happen.

you said you only threaten the ex con’s ?? Please your kidding about all this right ??

I’m sure a guy outta prison is gonna be scared of his new landlord. his old ones had guns and sticks and could have killed him and gottan away with it but your gonna scare them. they could probably make you be their girlfriend if the door was locked.

your posts i hope were jokes because if they weren’t, i seriously doubt your gonna last being that immature and frankly stupid.

Its been a good thread you guys and great humour…lolol

But we all deal with tenants the best proactive way possible… Every one need to get along…lol

to be clear to every one here…
I never wanted to threaten anyone, But just be clear, be up front with tenants…
and be polite…
I take it all back!!!..ok…lolol

Be up front and stern, But very polite…

Thanks guys!!! … good laughs…

Hey mike tell me about your lease option night mare… I am truly interested to know???

Dealing with these types of tenants is really like scraping the bottom of the barrel, they don’t care about your property (most of the time). Or where they are living. Add to the fact that you are targeting criminals and the insane I just hope you have the nerves to deal with that you are getting into.

Dealing with “grade A” tenants is tough enough, dealing with tenants that may kill you for smiling at them is even harder. Where are these properties located that you are after? there were some very good points mentioned in this thread about the nice people living right next to the property, they will want a word with you when thier kids start getting into trouble, and they will blame you for damage to their property etc… The bottom line in my opinion is simply weight the reward against the what I call Headache factor. If you feel you can handle the stress of dealing with all that emotional baggage go for it. For myself, I’ll pass.

Hi Stjepan,

We bought the property already (in TX). I have been thinking about it seriously because I just don’t want any trouble at all even though the money seems good but the headache that might come with it may not worth it.

Our couple friend who said she has been doing it for 3 years is insisting there is no harm in it and she knows 3 more people that have been doing it for over 12 years. She says one particular lady has 5 properties rented to these “subprimes” and makes profit of over $7,000 per month (net after all expenses and mortgages). She says she runs background check and mostly take people on social security, abused women, mildly retards.

I really appreciate everyone’s contribution, I just feel I have to ask you professionals since I have never even heard of it before.