When I bought my rental buildings I was not planning to rent to Section 8 tenants, I didn’t even know what Section 8 was! One day a pleasant young mother called to inquire as to whether I would accept Section 8. I took an instant liking to her, and made a call to the city to found out how this program works. Basically, the city pays the rent, and the federal government reimburses the city. There is a lot of extra paperwork, but once you understand the process, it goes rather smoothly.
The vast majority of Section 8 voucher holders are single mothers with children, but a few are grandmothers with grandchildren. Vouchers are normally in force until the children are grown, but the government’s portion of the rent fluctuates according to the tenant’s income.
You are actually better off to have a tenant with a low income, since in that case the government will pay the majority of the rent, and it will be on time.
Before applying for the program, call your local Section 8 office and find out what the allowed rents are in your city for 1, 2 and 3 bedroom homes. Rents are determined according to the average in your area. If the amount is acceptable to you, call your building inspector to find out if all of your “bedrooms” qualify as such. You will find that lofts, dens without closets and some basement rooms do not qualify as bedrooms.
The next step is to schedule an inspection. Before the inspector comes, patch any holes or tears in screens, make sure bi-fold and sliding doors operate smoothly, and check that all electric outlets are grounded. I use a little plug with three colored lights built-in that indicate whether the outlets are properly grounded. Make sure that you have ground-fault-interrupter outlets near sinks in the kitchen and bathroom, as they will definitely be looking for that. GFI outlets have the little red reset button. Also make sure that bathtubs and sinks drain quickly. Make sure that all light fixtures have working light bulbs. Check for loose stair treads and handrails. Basically, the inspector is looking for functionality and safety. He will not care whether or not you have a dishwasher, but if there is a dishwasher, it should be in working order. Similarly, he will not care whether you have painted or installed new carpet, but loose carpet will not pass, and neither will holes in the walls!
When you have passed inspection, you may find that your local city housing authority has a Section 8 family interested in your unit. Make sure that your unit is on their list of available homes, as this is not necessarily automatic.
To attract a tenant, just put the line “Section 8 Ok” at the end of your regular advertisement. This will actually discourage tenants that do not have Section 8 vouchers, so you will need to run a separate ad to attract them. Make sure all your ads list the same price. You are not allowed to charge Section 8 tenants extra, even though the whole process is more work for you.
When you start to receive calls on your ad, you will find that many of the callers are under the mistaken impression that they can move on the first of the next month, when in fact their lease calls for 60 days notice, and the 60 days does not begin until the 1st of the month following the notice. They also sometimes tell their landlord that they are “thinking about moving,” and then mistakenly think that this was sufficient notice. I only mention this because in my experience most of the Section 8 prospects who call me have not given sufficient notice to their current landlord, and they cannot afford to pay rent on two separate apartments. I always talk to the current landlord to find out the situation. You will find that these applicants appreciate the extra help.
It is very important to have a well-designed lease. If you have a rental housing association in your state, join it just to get access to their lease. These associations keep on top of the latest court rulings and new laws, and their leases are simply the best.
If you are in the habit of getting background and credit checks for all your prospective renters, you may continue to do that, but don’t expect to see good credit. Your tenant will probably not have a job, and her income will probably fall between $0 – $800. per month. She will probably not have a credit card or a checking account.
The most important reference to check is the previous landlord. Make sure her kids don’t cause trouble with the neighbors. If your prospective tenant gets on good with her landlords, then the credit history is a moot point.
Sometimes Section 8 mothers are tempted to let a boyfriend move in and help with the household expenses. If this happens and the housing authority finds out, she will lose her voucher and you will lose your renter. I always mention this before accepting a new renter, and they will quickly back away if this is what they had in mind. Don’t assume they know everything about the program, as they are young and inexperienced.
You may wish to price your rent a little higher and include the utilities, as your Section 8 renter is very likely to not pay her utility bills when they are due. Often these renters have skipped on previous utility bills and will be surprised to find out that the old bills have followed them to their new residence. They will sometimes break a lease over a utility bill, so if you are able to include it in the rent, do so.
If you manage an apartment building, it is best to not fill it up with Section 8 tenants. No one wants the stigma of living in a “welfare building.” It is best to keep a good mix of tenants, and no one will ever know that your Section 8 tenants receive any kind of assistance.
One final caution, these young ladies do not own toolboxes or even so much as a screwdriver. You must have a handyman or maintenance person available to push the reset button on the garbage disposal when it jams, reset circuit breakers, change furnace filters and fiddle with the floats on temperamental toilets.
In spite of all these cautions, you have a good chance of getting an excellent long-term tenant. Most single mothers are looking for a good neighborhood to settle in, and they generally do not want to move once their children have started school.
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