Section 8 pros and cons
I am learning about section 8 renters. I know the government pays part of the rent and the renter has to qualify for it. So a guaranteed income from the government part. What about the tenant part? What do I need to know about the cons of going with a section 8 tenant? According to the current lender, the rent was never raised for 4 years. How hard is it to adjust the rent to the current market? Who decides how much to ask for rent? What if the tenant doesn't;t pay their part? is it more difficult to get them out bc of the government involvement?
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@Nicole Harrington have you searched the forums? There are pages of threads on this topic. I haven't done section 8 but you if you include your property location you may get some specific area advice. The short story of what I have read is they stay longer, they are harder on properties in general, they have caseworkers you can call, and you can get them out with an eviction like anyone else. One big point is some areas people say section 8 pays more then market, some less.
The location is Carrolton GA/ Atlanta GA I ahve searched in the forum, but nothing recent from the Atlanta Area.
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@Nicole Harrington the pros and cons don't change much but locals can tell you how your local programs are to work with. There is a HUD database where you can put your location in and it will give you the FMV rent on which HUD bases section 8. If that doesn't agree with market then don't bother with section 8. I hope someone in the Atlanta are can tell you how section 8 is to deal with in your area.
Thank you
The cons I’ve found are tenants that absolutely feel entitled and don’t take care of the property whatsoever. We no longer participate in the program, the cons greatly outweighed the pros for us.
Quote from @Matt M.:
The cons I’ve found are tenants that absolutely feel entitled and don’t take care of the property whatsoever. We no longer participate in the program, the cons greatly outweighed the pros for us.
Thanks that is something i was concerned about.
but kind of thought bc the tenant has to qualify and can't fall off the wagon, they would actually be better renters
Depending on where you're at, the local government office can be easy or a challenge to work with.. especially when it comes to inspections. The process to get signed up can be lengthy but onces you're approved as a section 8 landlord it gets a little easier. Section 8 has standards to ensure the tenants are living in a home that is up to code.
For tenants, generally it takes a long time to get approved so tenants usually work hard to keep their end of the bargain. Most tenants stay for a very long time as well because it is hard to find good homes with good landlords. As long as you're under contract and the home is up to code, you can almost guarantee you'll get paid. When vetting tenants, you want to select those who are working and not 100% reliable on government assistance. They also need to have skin on the game and this is where you find the good tenants.
@ Colleen F. Where can I find the HUD database that will give you the fair market rent that HUD will pay ? Is there a website? Is it based on zipcode or by city?
I have not taken section 8 yet, but someone contacted me today about my vacant rental. She said she has a 3 bedroom voucher that will pay up to $1164 per month for a 3 bedroom place whether utilities are included or not. Is this normal ... that HUD will pay the same amount whether utilities are included or not, or is she probably mistaken about that? Thanks in advance for your time!
Pro-
- They pay on the first of the month
- I dont go to rent court
- I generally rent for slightly higher than market in my low income housing areas
Cons
- Sometimes there is entitlement
- Typically a section 8 tenant can be more dependent on maintenance issues
It's like a box of chocolates :-) I have met some really fantastic people over the years who are just trying to get by with the tools they have. Many are uneducated because they have been in the system for so long, many are trying to get off the system and are transitioning off assistance, some have mental challenges, some are just plain entitled and rude.
In my experience section 8 tenants are just like other tenants some are great and some are not. Make sure to still screen them and give them a great place to live and they will not want to move.
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Real Estate Agent Iowa (#S68688000)
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@Nicole Harrington We've had mixed results from section 8. Some tenants are great and take care of the property, some don't. However, be sure to check your state laws. Here in CO, secton 8 is now a protected class on the basis of source of income. Which means, if they call and ask if we accept section 8, the answer is always yes. However, they are to be screened exactly as everyone else is which means they still need to meet credit eligibility. We also do not decrease the rent if their voucher doesn't cover it. We ask if their voucher is ready to go and if not, we let them know we won't hold the property while they get it confirmed. The other thing to watch for is number of people to occupy the unit. Many section 8 recipients have a lot of kids and sometimes the number of people exceeds the number of bedrooms so check your municipality for the limitations on that. You will most likely be required to have your property inspected at least once a year for safety requirements. If they find anything, you will be required to remediate or the section 8 recipeint may have to move. This all depends on the local program administering it.
Thank you that is helpful. I will keep all that in mind.
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@Nicole Harrington I think the tenant is mistaken on with or without utility. Section 8 usually has a number that they give with utilities at least based on all I have read but I have not done section 8. Here is what I have used to look up FMV rents.
Fair Market Rents (40th PERCENTILE RENTS) | HUD USER In our area the market rent was higher then section 8 but recently they have increased section 8 to higher then market. that was a year ago. I can't say now.
Thanks i will check that out
Quote from @Nicole Harrington:
Thanks that is something i was concerned about.
but kind of thought bc the tenant has to qualify and can't fall off the wagon, they would actually be better renters
Total opposite
@Nicole Harrington
I personally own a rental property that I rent out via section 8 in Columbus OH. I would definitely recommend it. The hardest part about section 8 is getting the process down, like what to do and when. Sometimes they also just change the process and don't tell anyone. A big part of renting to section 8 tenants is screening them. Just because they have a voucher doesn't mean they are the right tenant. The same goes for average joes. Just because they make enough income doesn't mean their application is perfect. Did you do a background check? A big part of tenants treating properties badly is because people didn't screen the tenants adequately, so don't make that mistake.
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Real Estate Agent Ohio (#2021001448)
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What do you think is the most important part of the background check / proper screening for Section 8 renters? Talking to prior landlords? Minimum credit score of 500 or 525? No money owed to prior landlords in the past 5 years per their credit report? No evictions in the past 1 year? Thanks for your input!
There is a lot to learn. I ended up not taking the project need to learn more. Thanks everyone
Quote from @Tricia O'Brien:Minimum credit score should be no less than 600. No evictions, ever.
What do you think is the most important part of the background check / proper screening for Section 8 renters? Talking to prior landlords? Minimum credit score of 500 or 525? No money owed to prior landlords in the past 5 years per their credit report? No evictions in the past 1 year? Thanks for your input!
If a section 8 tenant gets evicted, most likely they lose their voucher for the program.
@Tricia O'Brien
For me, the most important part would be checking a tenant's court records to see if they have a criminal record. Talking to prior landlords helps, but I wouldn't rely heavily on it because if the tenant is a headache, wouldn't you want to make them look good to get out of your hair?
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Real Estate Agent Ohio (#2021001448)
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As stated previously, there's a huge amount of threads on here regarding section 8 (vouchers). There's pluses and minuses just like many other things. There's two reasons we don't participate in the program. First and foremost, we don't have problems filling our rentals so don't need the additional headaches.
The second reason is we have no desire to involve another layer of bureaucracy in our rental business.
I am not opposed to the program in principal, but don't want to play that game.
Quote from @John Teachout:
As stated previously, there's a huge amount of threads on here regarding section 8 (vouchers). There's pluses and minuses just like many other things. There's two reasons we don't participate in the program. First and foremost, we don't have problems filling our rentals so don't need the additional headaches.
The second reason is we have no desire to involve another layer of bureaucracy in our rental business.
I am not opposed to the program in principal, but don't want to play that game.
Same here John. No shortage of good applicants.
Makes sense