If for whatever reason Section 8 doesn't work out, am I obligated to return the deposit?

Hi Lynne, how did it work out with this tenant?

I would recommend anyone try both ways to see how the numbers work out. 

If you bought the property after the fact and they do not report sales per the lease or personal financials now might be a good time to add that in exchange for considering any kind of rent relief or deferment.Before putting all this work into a workout you need to have ultimate clarity on a single unit mom and pop operator if they have a long term chance to recover or not.  

The goal there to at break even or better and hopefully have things workout well on the appreciation end over the long term. 

It did not work out so well for New York.

IMO...You are best off trying to work out a payment plan with the resident or hiring a competent local property manager to see this through.

For example, any areas where tenants may congregate, including the lobby areas, club houses, gyms, or dedicated workout areas should be closed until health officials declare social distancing is no longer needed.

For example, any areas where tenants may congregate, including the lobby areas, club houses, gyms, or dedicated workout areas should be closed until health officials declare social distancing is no longer needed.

Then you're out $5,200; this is why reserves are important, hopefully you can work out some sort of payment plan with the tenant to be made whole but if not this is part of the risk with RE investing, this can happen even in normal times.