Renting to Felons: Risk vs. Reward

For many, the stain of a felony is hard to overcome, employment is not easily achieved, and even finding a place to live can be a struggle. Finding …

For many, the stain of a felony is hard to overcome, employment is not easily achieved, and even finding a place to live can be a struggle. Finding a place for former inmates to live presents a unique opportunity for those in ownership of low-income or group housing, or even a single-family unit, who could potentially cater to a niche, needy and often maligned market of renters.

As many as 12 million Americans have a felony conviction, and some 600,000 former convicts are released from prison each year, making up roughly 8 percent of the working class population, according to the Los Angeles Times. So where do all these people go?

With few places to go, some 10 percent of those recently released from jail will become homeless, according to

An investor willing to take a chance could have a large and willing group of renters at their disposal if they would be willing to rent with those with a felony conviction. However, doing so—like any investment—is not without its share of risk.

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The Corporation for Supportive Housing recognizes that risk and is working to ensure former inmates and felons have a supportive housing environment that will keep them off the streets, according to Housing Finance. Without help, many former inmates relapse into bad behaviors, repeating the cycle many times over.

Another cause for concern is the increasing amount of mentally ill currently incarcerated and being released each year. Many of these inmates will fall in and out of homelessness upon being released, as their situation is far more delicate.

The Housing Authority of Utah County provides rent vouchers for up to 950 households, catering to those falling below the poverty line and the formerly homeless, according to, a state of Utah publication. The goal of the program is to help those in need, getting them back on their feet with a stable home and positive resources and influences.

Additionally, Utah’s Food and Care Coalition is planning to build 37 units of transitional housing, catering to those suffering from both addiction and mental-illness, according to Deseret News. Residents of transitional housing nationwide typically receive education and job training and placement, as well as substance abuse counseling.

With programs now addressing the needs of former inmates and those in need of a permanent home, interested investors could potentially have additional support upon opening their doors to those in need.

The catch, however, is that simply owning low-income housing may not warrant property owners any help from these programs. Further, while hiring an ex-convict can provide a small business owner with a tax break, there is no equivalent tax break for property owners who rent to ex-convicts. Investors must understand the risks of these kinds of rentals.

The rewards, on the other hand, could be handsome: Not only would property owners constantly have willing renters, but they would also receive the satisfaction of helping get someone back on their feet, and willingly contributing to their second chance, while improving their community.

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