Need Some Advice for a Potential Tenant That Approached Me

[Thomas O'Donnell]

I currently have my duplex listed on multiple sights and it has been for about a month now. I have had some leads but most of them were either section 8 or did not meet one or more of my minimum requirements. I recently have thought about accepting section 8 due to the area but do have concerns about it. My neighbor approached me with her friend when I got home from work today, and they were asking about the other side of my duplex to rent. Her friend said that she has section 8 and 3 kids and is currently qualified for $1400 via Section 8 program (I have it listed at $1325 but would increase to $1400 if section 8). She also stated that she has been at her job for 3 years (of course all of this would need to be verified). I currently have a rental questionnaire that I have people fill out with basic information before I decide if they meet my standards enough to offer a showing. They were insistent that I should accept section 8 as there are a good amount of people in this area who are on the program. Obviously they don't make my decisions for me, but I just wanted your guys' thoughts on what I should do. I've been struggling to get leads that actually meet my standards, but I am very cautious of section 8. I also was put in a weird situation that I was not expecting and I said I did not currently accept section 8 but I might look into it. I told her that I would view her questionnaire and that she would receive an email response. My number is on the sign in the front yard and they said they would be calling me. There is a process to this whole thing and I'm not sure how I should explain that without being rude. This has to be treated like a business, so there are systems that need to be gone through such as the questionnaire, then a showing (if qualified), then the actual background/credit/income checks with the application. Does anyone have some input on how I should deal with this? As I have been considering section 8 but have not decided on it. On the one hand, her friend would be living next door and if I was to rent to her, it's hard to imagine her wanting to lose her voucher and be displaced from living next door to her friend. I would imagine she would want to do what she could to maintain and stay in the unit. However, anything could happen. Thanks to all who respond!

[Katherine Serrell]

Pros:

- Guaranteed rent direct deposited to your checking account each month by the U.S. government (and they are never late)

- HUD publishes the fair market rent increases every year so you can ask the section 8 office for an increase in rent and as long as it is within reason, it is normally granted.

- It is hard to find landlords that accept vouchers (in my city the waitlist alone is 200+ families) so people are more likely going to want to avoid getting evicted once they find a home. There are statistics on average occupancy for Section 8 occupants depending on your county but based on my memory it is like 7 or 8 years at a time on average.

- You can screen them and run background checks just like any other tenant. The tenant's is obviously not going to meet your standard "3x monthly rent" criteria, hence why they have a section 8 voucher.. so you dont have to scrutinize their income or credit score to the extent you normally would. 

- You can evict section 8 tenants the same way you evict non-section 8 tenants 

- Your property is inspected by the section 8 program

- You have the tenant's "housing counselor" as a point-of-contact to help you throughout the onboarding process and if issues arise with the tenant (to an extent) 

- Your helping a family in need

- The tenant and the neighbor/friend would presumably get along

Cons:

- Bad stigma because landlords think "oh the government is paying! I dont need to screen these tenants very well (or at all)!" and they end up with trash tenants and blame "bad section 8 tenants" versus their lack of due diligence. 

- You have to go through a pile of paperwork for your first one as a landlord.

- You have to wait for an initial inspection to get approval to have the tenant move-in (could be a few days or a couple of weeks)

- Your unit has to pass the standard HUD inspection but if your not a slumlord this should be a non-issue.

- The tenant and the neighbor/friend could suddenly stop getting along 

You are right, anything could happen. Anything could happen with any tenant even if their background check, credit, income, etc are perfect. Based on the fact pattern you gave, I personally would jump at the opportunity to get guaranteed rent (especially going into a recession), a multi-year renewal, low turnover, and annual rent increases even if I had to go through a little red tape.