Need Some Advice for a Potential Tenant That Approached Me

Thomas O'Donnell · 2022-12-02T14:09:14-08:00

I currently have my duplex listed on multiple sights and it has been for about a month now. I have had some leads but most of them were either section 8 or did not meet one or more of my minimum requirements. I recently have thought about accepting section 8 due to the area but do have concerns about it. My neighbor approached me with her friend when I got home from work today, and they were asking about the other side of my duplex to rent. Her friend said that she has section 8 and 3 kids and is currently qualified for $1400 via Section 8 program (I have it listed at $1325 but would increase to $1400 if section 8). She also stated that she has been at her job for 3 years (of course all of this would need to be verified). I currently have a rental questionnaire that I have people fill out with basic information before I decide if they meet my standards enough to offer a showing. They were insistent that I should accept section 8 as there are a good amount of people in this area who are on the program. Obviously they don't make my decisions for me, but I just wanted your guys' thoughts on what I should do. I've been struggling to get leads that actually meet my standards, but I am very cautious of section 8. I also was put in a weird situation that I was not expecting and I said I did not currently accept section 8 but I might look into it. I told her that I would view her questionnaire and that she would receive an email response. My number is on the sign in the front yard and they said they would be calling me. There is a process to this whole thing and I'm not sure how I should explain that without being rude. This has to be treated like a business, so there are systems that need to be gone through such as the questionnaire, then a showing (if qualified), then the actual background/credit/income checks with the application. Does anyone have some input on how I should deal with this? As I have been considering section 8 but have not decided on it. On the one hand, her friend would be living next door and if I was to rent to her, it's hard to imagine her wanting to lose her voucher and be displaced from living next door to her friend. I would imagine she would want to do what she could to maintain and stay in the unit. However, anything could happen. Thanks to all who respond!

Kit SerrellBusiness Member

Investor · Member since 2021 · 157 posts · 218 votes

3y

Pros:

- Guaranteed rent direct deposited to your checking account each month by the U.S. government (and they are never late)

- HUD publishes the fair market rent increases every year so you can ask the section 8 office for an increase in rent and as long as it is within reason, it is normally granted.

- It is hard to find landlords that accept vouchers (in my city the waitlist alone is 200+ families) so people are more likely going to want to avoid getting evicted once they find a home. There are statistics on average occupancy for Section 8 occupants depending on your county but based on my memory it is like 7 or 8 years at a time on average.

- You can screen them and run background checks just like any other tenant. The tenant's is obviously not going to meet your standard "3x monthly rent" criteria, hence why they have a section 8 voucher.. so you dont have to scrutinize their income or credit score to the extent you normally would.

- You can evict section 8 tenants the same way you evict non-section 8 tenants

- Your property is inspected by the section 8 program

- You have the tenant's "housing counselor" as a point-of-contact to help you throughout the onboarding process and if issues arise with the tenant (to an extent)

- Your helping a family in need

- The tenant and the neighbor/friend would presumably get along

Cons:

- Bad stigma because landlords think "oh the government is paying! I dont need to screen these tenants very well (or at all)!" and they end up with trash tenants and blame "bad section 8 tenants" versus their lack of due diligence.

- You have to go through a pile of paperwork for your first one as a landlord.

- You have to wait for an initial inspection to get approval to have the tenant move-in (could be a few days or a couple of weeks)

- Your unit has to pass the standard HUD inspection but if your not a slumlord this should be a non-issue.

- The tenant and the neighbor/friend could suddenly stop getting along

You are right, anything could happen. Anything could happen with any tenant even if their background check, credit, income, etc are perfect. Based on the fact pattern you gave, I personally would jump at the opportunity to get guaranteed rent (especially going into a recession), a multi-year renewal, low turnover, and annual rent increases even if I had to go through a little red tape.

5 Reply

Allan Smith

Contractor · Nashville, TN · Member since 2014 · 1k+ posts · 1k+ votes

3y

How long can she keep her voucher if she has a job? Also, the rent you get is determined by zip code in my areas, not how much her voucher is. The city or county will have set rates, usually by bedroom number.

but to be honest, the tail is wagging the dog here. If no one is qualified it means your price is too high. Lower it or make updates to the property.

1 Reply

Thomas O'Donnell

OP

Rental Property Investor · Columbus, OH · Member since 2021 · 231 posts · 188 votes

3y

Quote from @Kit Serrell:

Pros:

- Guaranteed rent direct deposited to your checking account each month by the U.S. government (and they are never late)

- HUD publishes the fair market rent increases every year so you can ask the section 8 office for an increase in rent and as long as it is within reason, it is normally granted.

- It is hard to find landlords that accept vouchers (in my city the waitlist alone is 200+ families) so people are more likely going to want to avoid getting evicted once they find a home. There are statistics on average occupancy for Section 8 occupants depending on your county but based on my memory it is like 7 or 8 years at a time on average.

- You can screen them and run background checks just like any other tenant. The tenant's is obviously not going to meet your standard "3x monthly rent" criteria, hence why they have a section 8 voucher.. so you dont have to scrutinize their income or credit score to the extent you normally would.

- You can evict section 8 tenants the same way you evict non-section 8 tenants

- Your property is inspected by the section 8 program

- You have the tenant's "housing counselor" as a point-of-contact to help you throughout the onboarding process and if issues arise with the tenant (to an extent)

- Your helping a family in need

- The tenant and the neighbor/friend would presumably get along

Cons:

- Bad stigma because landlords think "oh the government is paying! I dont need to screen these tenants very well (or at all)!" and they end up with trash tenants and blame "bad section 8 tenants" versus their lack of due diligence.

- You have to go through a pile of paperwork for your first one as a landlord.

- You have to wait for an initial inspection to get approval to have the tenant move-in (could be a few days or a couple of weeks)

- Your unit has to pass the standard HUD inspection but if your not a slumlord this should be a non-issue.

- The tenant and the neighbor/friend could suddenly stop getting along

You are right, anything could happen. Anything could happen with any tenant even if their background check, credit, income, etc are perfect. Based on the fact pattern you gave, I personally would jump at the opportunity to get guaranteed rent (especially going into a recession), a multi-year renewal, low turnover, and annual rent increases even if I had to go through a little red tape.

Would it be smart to have section 8 tenants obtain renter's insurance? Or does the program cover things like that?

1 Reply

Michael K GallagherBusiness Member

Real Estate Agent · Columbus OH · Member since 2018 · 1k+ posts · 1k+ votes

3y

@Thomas O'Donnell if you are considering section 8 especially here in cbus, its going to be a process. I just placed a section 8 tenant over the summer and it took damn near 4 months to get the paperwork done and set up. if you are not familiar with the process of getting your unit approved for section 8 heres what my experience has been.

The voucher amount is based on bedrooms not on the actual voucher holders. So if you have a 3 bedroom unit then that $1400 number sounds right. but you won't get $1400 because that is the full amount including utilities etc. So when you fill out the RTA packet and submit it for your unit then that is what will tell you how much you'll actually get paid in rent. Expect somewhere closer to $1300 or $1350 depending on the utility splits.

Section 8 is great but the initial work involved is quite substantial and the system is pretty archaic so just be ready for that.

PS as a side not it is illegal in the city of Columbus to tell someone that you as a landlord do not accept section 8. Its illegal to deny someone based on source of income. My standard response now when someone asks me if I "accept section 8" is to say "yes we do accept vouchers pending you meet all other qualification standards".

Hope this helps and if you have more questions specifically about the section 8 process I'm happy to walk through it more.

[email protected]614-362-2231

2 Reply

Thomas O'Donnell

OP

Rental Property Investor · Columbus, OH · Member since 2021 · 231 posts · 188 votes

3y

Quote from @Michael K Gallagher:

@Thomas O'Donnell if you are considering section 8 especially here in cbus, its going to be a process. I just placed a section 8 tenant over the summer and it took damn near 4 months to get the paperwork done and set up. if you are not familiar with the process of getting your unit approved for section 8 heres what my experience has been.

The voucher amount is based on bedrooms not on the actual voucher holders. So if you have a 3 bedroom unit then that $1400 number sounds right. but you won't get $1400 because that is the full amount including utilities etc. So when you fill out the RTA packet and submit it for your unit then that is what will tell you how much you'll actually get paid in rent. Expect somewhere closer to $1300 or $1350 depending on the utility splits.

Section 8 is great but the initial work involved is quite substantial and the system is pretty archaic so just be ready for that.

PS as a side not it is illegal in the city of Columbus to tell someone that you as a landlord do not accept section 8. Its illegal to deny someone based on source of income. My standard response now when someone asks me if I "accept section 8" is to say "yes we do accept vouchers pending you meet all other qualification standards".

Hope this helps and if you have more questions specifically about the section 8 process I'm happy to walk through it more.

So if I decide not to do section 8, how do I properly reject a section 8 tenant? Or applicant? This lady in this story is constantly emailing me and wanting to apply when we haven't even done a showing or anything.

0 Reply

Marlin Kornegay

Member since 2022 · 2 posts · 2 votes

3y

Quote from @Thomas O'Donnell:

Quote from @Michael K Gallagher:

@Thomas O'Donnell if you are considering section 8 especially here in cbus, its going to be a process. I just placed a section 8 tenant over the summer and it took damn near 4 months to get the paperwork done and set up. if you are not familiar with the process of getting your unit approved for section 8 heres what my experience has been.

The voucher amount is based on bedrooms not on the actual voucher holders. So if you have a 3 bedroom unit then that $1400 number sounds right. but you won't get $1400 because that is the full amount including utilities etc. So when you fill out the RTA packet and submit it for your unit then that is what will tell you how much you'll actually get paid in rent. Expect somewhere closer to $1300 or $1350 depending on the utility splits.

Section 8 is great but the initial work involved is quite substantial and the system is pretty archaic so just be ready for that.

PS as a side not it is illegal in the city of Columbus to tell someone that you as a landlord do not accept section 8. Its illegal to deny someone based on source of income. My standard response now when someone asks me if I "accept section 8" is to say "yes we do accept vouchers pending you meet all other qualification standards".

Hope this helps and if you have more questions specifically about the section 8 process I'm happy to walk through it more.

So if I decide not to do section 8, how do I properly reject a section 8 tenant? Or applicant? This lady in this story is constantly emailing me and wanting to apply when we haven't even done a showing or anything.

I had this happen to me on my first and only deal. Be honest with anyone you run into in this business. Keep your property listed as is. When you get the section 8 question, remember these people get denied for housing frequently. Be honest and let the perspective tenant know you are working with the city to obtain the proper certifications to accept section 8. Let them know this could take a few weeks. In the meantime if you find a tenant that fits your requirements then nothing is lost if not you'll learn the ropes on section 8 and have and advantage in your market moving forward. Just be honest, it's fast efficient and easy.

2 Reply

Thomas O'Donnell

OP

Rental Property Investor · Columbus, OH · Member since 2021 · 231 posts · 188 votes

3y

Quote from @Marlin Kornegay:

Quote from @Thomas O'Donnell:

Quote from @Michael K Gallagher:

@Thomas O'Donnell if you are considering section 8 especially here in cbus, its going to be a process. I just placed a section 8 tenant over the summer and it took damn near 4 months to get the paperwork done and set up. if you are not familiar with the process of getting your unit approved for section 8 heres what my experience has been.

The voucher amount is based on bedrooms not on the actual voucher holders. So if you have a 3 bedroom unit then that $1400 number sounds right. but you won't get $1400 because that is the full amount including utilities etc. So when you fill out the RTA packet and submit it for your unit then that is what will tell you how much you'll actually get paid in rent. Expect somewhere closer to $1300 or $1350 depending on the utility splits.

Section 8 is great but the initial work involved is quite substantial and the system is pretty archaic so just be ready for that.

PS as a side not it is illegal in the city of Columbus to tell someone that you as a landlord do not accept section 8. Its illegal to deny someone based on source of income. My standard response now when someone asks me if I "accept section 8" is to say "yes we do accept vouchers pending you meet all other qualification standards".

Hope this helps and if you have more questions specifically about the section 8 process I'm happy to walk through it more.

So if I decide not to do section 8, how do I properly reject a section 8 tenant? Or applicant? This lady in this story is constantly emailing me and wanting to apply when we haven't even done a showing or anything.

I had this happen to me on my first and only deal. Be honest with anyone you run into in this business. Keep your property listed as is. When you get the section 8 question, remember these people get denied for housing frequently. Be honest and let the perspective tenant know you are working with the city to obtain the proper certifications to accept section 8. Let them know this could take a few weeks. In the meantime if you find a tenant that fits your requirements then nothing is lost if not you'll learn the ropes on section 8 and have and advantage in your market moving forward. Just be honest, it's fast efficient and easy.

Thanks! Appreciate it. Short and sweet.

0 Reply

Need Some Advice for a Potential Tenant That Approached Me

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