Property Management with a Conscience

3 07 2009

By: Hannah Kim

Another business model we could use to help provide supported housing for the homeless is to set up a non-profit property management company that specializes in looking after residential real estate.

The investment groups idea in a previous post aims to actually place homeless people in apartment suites at a rental rate of just $375/month by connecting them with a group of about five landlords (I.e. investors in a “giving circle”) who own the suite together.

In this alternative scheme, we would attract relatively affluent tenants who are willing and able to pay premium rental rates on high-quality apartment suites. Such premium rent would be the incentive for landlords to hire our property management company. The commission our property management firm earns would then be used to subsidize rent for the homeless people we are helping. In other words, the homeless people are NOT the tenants of the apartments we are managing; they are the recipients of some of the revenues our organization makes from managing premium real estate. Here is a simple diagram illustrating this model:

Property Management with a Conscience

Here are some of the tasks that we would be responsible for as a property management company (Wikipedia, June 2009, http://en.wikipedia.org/wiki/Property_management):

  • Accepting rent
  • Taking care of maintenance and repair
  • Acting as a buffer between tenant constituency groups and landlords who want to be distanced from them
  • Looking after accounts and finances of the real estate properties
  • Participating in or initiating litigation with tenants, contractors and insurance agencies

This property management model must of course be combined with “behind-the-scenes” efforts to 1) actually find affordable housing for the homeless that we subsidize, and 2) provide counselling and employment assistance for the homeless. For instance, the homeless may be trained to work as part of the property management team (in maintenance, security, bookkeeping, etc.)!

As you can see, setting up a property management requires expertise in the areas listed above as well as a high degree of involvement with the landlords. This business model also assumes that we can either steal existing clients away from other property management firms or convince owners of a newly built property to trust us without prior experience/reputation.

How viable do you think this social innovation is? Let us know by leaving a comment!

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3 responses

4 07 2009
Dee

Thanks for sharing your idea! I find it interesting and will follow your blog updates to see how you progress.

14 07 2009
Hannah Kim

Thank you Dee! Please come back and comment on our other ideas as well. 🙂

Hannah

13 07 2009
Naples rental management

Nice work guys 🙂

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