Renting to Section 8 Individuals

[Melba Chambers]

I am considering buy a rental property in a "C" neighborhood and looking to rent it to Section 8 individuals. Does anyone have any experience in this field. I am new to investing and just want to look at all of my options.

[Patti Robertson]

@Jeff G. - Yes, I require mine have tenant insurance and even buy it on their behalf and charge them the monthly fee for it. VA allows us to do that. It won't, however give you the coverage I think you are looking for from tenant created damage. What it will do is step in in the event the tenant accidently catches the house on fire (which we have had happen twice) to be the primary insurance to fix repairs, put them up in alternative housing, and replace the tenant's belongings. It avoids an owner insurance claim for accidental destruction for things they are covered for anyways. It doesn't cover damage from a tenant's intentional or neglectful misconduct. We do hold tenant's accountable for damage they do, at the time they do it. If you wait until they move out you will never get paid. If you fix a hole in the wall, for example, put it on their ledger and send them a bill. When they don't pay it, take them to court to get a judgment and notify the case worker. Until that judgment is paid, the tenant will not be allowed to have a new set of paperwork issued to move, so you sort of hold them hostage. Usually they eventually find a way to pay it, either with the help of a family member or a charity. Some tenants will always have a small running balance of outstanding maintenance because they rely on you to be their bank. As long as the damages are relatively small - holes in walls, broken blinds, missing light globes, broken appliances pieces, pest control, we just fix it and follow the procedure above. If they never pay and build a balance the comes close to equaling the amount of their deposit, we already have possession and can evict at our discretion since we have already taken them to court. (Thank you Virginia Legislatures.) We give them one more shot and let them know that if they don't pay we will have not choice to evict and let their case worker know the situation. If we evict, they lose their voucher, which puts them at risk of homelessness, so often times they are able at that point to find someone to catch them up to a zero balance. One of our cities has more resources for tenants than the others, and therefore it is my city of choice to landlord in.

In my observation, most landlords are unwilling to expand the energy or expense to take tenants to court, SEC 8 or not, especially if they feel they have a low chance of collecting. That's why we end up with deadbeat tenants. They don't become deadbeats overnight. They are allowed to operate under the radar because the landlords they scammed in the past were to lazy or cheap to bother taking them to court so the rest of us could be warned. I know some states have very tenant friendly landlord tenant laws, however SEC 8 is a federal program and the state laws don't trump it. You may not be able to evict a tenant as quickly as we can in VA, but HUD dictates whether or not their paperwork to move can be reissued, not the state. Use the laws to your advantage. It helps to have a list of charities and organizations you know will help tenants who are at risk of homelessness that you can provide with your default notices to low income tenants.