Guest Blogger: Section 8 Vouchers

Michele was busy this week so asked me to write a guest blog. As her husband I have been part of the landlording adventure with her but not only that I have also been a Public Housing Authority (PHA) commissioner for about 7 years along with being an advocate for "affordable housing" for over a couple decades". I thought I'd take the time write a little something about a somewhat controversial subject among landlords.

Section 8 Vouchers - You should accept them!

I will start this off by admitting that not all public housing authorities are the same. There are some that are poorly ran and some that are almost openly hostile to landlords. If this is the case in your area do what you can to get new commissioners appointed. PHAs should be a landlord's friend not an enemy.

With that said I have one more warning for people considering accepting section 8 tenants. You still need to screen your applicants. The PHA does very little screening regarding who gets vouchers. We verify their income and do a criminal background check but it is likely that our standards are not the same as yours. We don't screen for how they treat their places or how responsible they are. Don't go cheap when taking a section 8 tenant: screen them just like you would anyone else. I've been amazed how often I hear stories of bad section 8 tenants and find out it was because they weren't screened by the landlord.

Now that that is out of the way I want to promote the good reasons to take section 8 vouchers. The biggest reason has to be that your money is guaranteed. HUD isn't going to lose their job, get sick, or run away to another country. Government shutdowns may slow things down but they will pay every month that your tenant is on the program. And the money should come regularly and on time.

If your properties are affordable housing that would be a good fit for section 8 clients then there is a good chance you can get higher rents from section 8 tenants. PHAs pay based on HUD's fair market rent (FMR) values which you can find here: https://www.huduser.gov/portal/datasets/fmr/fmr_il_history.html . Each PHA is different but vouchers are based on paying 90-110% of FMR. If your property is below FMR for your area you may be able to get higher rent from a section 8 tenant. Something to consider.

For section 8 tenants PHAs will come out once a year (this frequency is currently varying because of budget issues) to inspect your home. Hopefully, you are already inspecting your homes once a year. If so, you can consider this a free inspection. Either stop doing your own or do them less frequently. And if the repairs needed are because of the tenant then the PHA will require the tenant make the repairs and if they don't they can lose their voucher. Either you get the problem fixed or they lose their voucher and you get rid of a bad tenant.

The section 8 voucher is often seen as a golden ticket. There is a long waiting list to get on one and once you're on you can often stay on forever. People don't want to lose them. This is leverage to get what you want. If a tenant doesn't pay damages you can work with the PHA to revoke their voucher. There is a long list of things that can cause someone to lose their voucher (http://www.coloradolegalservices.org/lawhelp/resource/termination-from-participation-in-section-8-v?ref=qffhE). These are things most landlords don't want their tenants doing either. Anything that reduces the likelihood of that happening should be considered good to a landlord.

Don't get me wrong. Section 8 tenants aren't the greatest tenants you'll ever have like all low income tenants they have their own issues. But if you own properties that rent for FMR they are worth looking into and I hope people try. The more landlords that work with PHAs the better homes we can find for people and the better relationships PHAs and landlords can build.