Should I take section 8 tenant?

Question

Answer

Section 8 is a federal program but administered on a local level. Procedures and attitudes can vastly differ by what local area you are in. Can you find someone in your same city who rents to sect 8 tenants? Find out if there's a local investor's club and see if you can meet some people there.

Answer

I have been dealing with section 8 for over ten years and it can be very rewarding. It's really no different than managing market rate rentals as long as you use the same screening process equally. I manage over a dozen section 8 tenants and i have no horror stories to tell. Actually, I always wondered why more investors did not partner with their local housing authorities. It's definitely a part of my business model. I try preempt all repairs by communicating with tenants bi-monthly which usually works out well for both parties. For me, it sets the stage for a hassle free annual inspection. Oh, and like mentioned above, the payments are clock work.

Answer

Sam, not exactly.... 1. You advertise and get potential applicant and completed application. Tenant should ALREADY be Section 8 approved and have a voucher to show that. It will show the maximum rent that do and what portion is paid by S-8 and how much they pay themselves. 2. The S-8 rents for the entire country are at http://www.huduser.org/portal/datasets/fmr.html fmr = fair market rents 3. Before the tenant moves in S-8 will have to inspect the unit and it must meet their standards. 4. After inspection then you can sign lease to start on the first of the month in which S-8 has already agreed to start paying the rent. This may be the next month or the month after that. The whole inspection, approval, HUD paperwork process can take a month or two depending on the individual office workload.

Answer

Sam, just qualify people on the consistant basis and same qualifications regardless of thier source of money as being reliable. Some landlords have a stigma given to Sec 8 tenants that most often undeserved. They are at a lower middle income or low income level and there is not much difference between them as anyone else in the same renatal price range. There is a benefit that rent collections will be uneventful, usually unless the HA office messes up, but the rent is like clockwork. Even in Florida! Treat them right, give them a decent well maintained home and you can have a very long term tenant with rent increases as market rents go up. Good luck

Answer

Wow, I learned so much about section 8 tenants from this thread. Thank you all! David Krulac - Thank you for sending the link for S-8 rents. The steps you suggested also makes a lot of sense. Thank you all again. After all your thoughts and suggestions, I feel a lot more comfortable and equipped with knowledge about section 8 tenants.

Answer

I give Section 8 two thumps up! You the rent is coming in one time - for the most part.

Answer

So, this is what I am planning to do - 1.) Have the prospective tenant fill the application form and perform screening. 2.) Meanwhile contact her case supervisor and inquire about if they have rent ceiling already established on this address and also understand how long inspection will take and when apx would I expect to get paid. If all sounds good move to next step. 3) if credit history and background check all come good, accept the application. 4.) Collect security deposit from tenant and have her sign the lease even if her move-in date is about 30 days out. ( I am assuming I can't collect first month rent as state may not be able to pay prior to inspection. Is that right?) 5.) Once tenant moves in wait for the first rent payment to be done in a month or 2 out (including the tenant portion?) Am I doing this right?

Answer

A very experienced property manager said they do very well with Section 8, but they do the following: * for new prospects, they require an inspection of tenant's current house/unit. If the prospect balks at this, they move on. He indicated that he has had very good luck. * Section 8 tenants will typically stay in your unit longer, and as we know, turnover is the ultimate profitability killer. * Finally, he said that he writes it up in the lease that the Sec 8 tenant must act as the liaison for all dealings with their case worker, etc., minimizing their administrative time spent.

Answer

I'm all for Section 8 as long as you go through the same screening process with them as you would with other tenants. The waiting list for Section 8 is so long now that anyone in the program will usually do whatever is necessary to stay in the program and not get the boot. I caught one tenant stealing from the property and threatened them with eviction. Instead of getting evicted and losing their voucher, they voluntarily moved. Saved me a bunch of effort! I also really like the automatic deposits every month. :)

Answer

@Sam Schlacter I've been renting section 8 for many years though it is a small portion of the business. I like to see a section 8 tenant with a job. One section 8 tenant was a state employee with 2 kids and qualified for section 8, with S-8 paying about 1/3 to 1/2 of the rent. Qualifying S-8 tenants by income doesn't work as many don't have income. Section 8 requires a parent with children over 6 years old to work 20 hours a week, while a parent with children less than 6 years old don't have to work at all. An eviction will take the S-8 tenant off the S-8 list and is a deterrent as well as the S-8 yearly inspections to keeping the property in good order. Good housekeeping is a S-8 rule and poor housekeeping can be a cause for inspection rejection and re-inspections. A single parent with 2 kids of different genders will qualify for a 3 bedroom unit and can be ideal tenants as there are only 3 people in a 3 bedroom unit. Elderly single tenants are also usually good section 8 tenants. The rent comes like clock work being direct deposited into your account. Some of my tenants have gotten 100% rent but that is rare, most get from 1/3 to 2/3 assitance from Section 8 and have to pay the difference themselves plus the utilitites. I always include sewer and trash charges in the section 8 rent for houses/townhouses and always include sewer, trash and water in the apartment units, but always have the section 8 tenant pay their own heat and electric. 2. You can deny any applicant S-8 or non S-8 for any reason, even bad breath, sloppy clothes etc, as long as you are not discriminating against any as a protected clss as defined by law, like race, religion, sex, age,etc. If you reject somebody for a credit score, you should have that in writing and apply that standard of yours to everybody. 3. Lease is with S-8 and tenant, I also have tenant sign my standard lease, so the tenant in effect has 2 leases. 4. We never pay heat or electric for a S-8 tenant apt or house and never water metered seperately for a S-8 house tenant. 5. Here, and I expect most S-8 offices require an inspection of the proeprty before they will pay any rent. This can be a delay, in some counties the inspection can be a month out. 6. The S-8 allowable rent is on the HUDUSER website and is the median rent for the area. They don't usually pay more than the median rent. If your market rent is above the median rent for the area, S-8 won't pay it. Many of our properties, actually most of our properties are above the S-8 max rent level. When we advertise we always include the monthly rent in the ad, to prevent a lot of inquiries expecting lower rents. When we have a place that meets the S-8 max rent level we will include in the ad "SECTION 8 OK" which attracts many inquiries as so many properties are above the rent levels or the owners/manager won't rent S-8.