Class C and Section 8 Tips?

9 Replies

Does anyone have tips for finding tenants for class C and/or Section 8 rentals?

Background: I bought two houses last year in a Class C- neighborhood and quickly rented them out.  One to a Section 8 (50% rent covered, her credit was shot and income too low) and one to a regular Joe with credit just shy of 600 and a good rec from current landlord and employer, and decent income.  Things went pretty well, each renter occasionally paid late but also paid the late fee; the numbers looked great on paper.  So I bought house #3, which was a fixer upper.  Then, regular Joe  turned into a PITA renter and by mutual agreement we terminated the lease (house was in okay shape but was FILTHY).  I used my reserve money to repaint and clean and the house is ready to rent.  Then, the section 8 renter had a death in the family and didn't renew the lease (did not qualify for that size house anymore).   Finally, I finished up my fixer upper.  So now, all three rentals are empty!  EEK.  

Houses 2 and 3 are ready to rent.  House #1 needs to be re-painted, but I don't want to spend the last of my reserve on it until I get the other two rented. House #1  and #2 are in C- neighborhoods, house #3 is in a B- neighborhood.  I'll be honest, since I was focusing on the fixer upper, I did not put much effort into getting the others rented.

But the past couple of weeks I've really started advertising and following up with inquiries. I've had lots of interest in houses 2 and 3, and am showing each a couple of times a week. But I am so leery of getting another Filthy Joe that I'm wondering if I'm being too stringent. I have been asking for good references from both employer and current landlord, a credit score of 600, and no evictions.  I've had half a dozen serious applicants and NO ONE meets the credit score.  Several  checked out fine other than credit, but I still turned them down.  

Am I being too stringent?  My "good" renter had been the section 8 renter who didn't meet any of my rules....the Filthy Joe met the rules but turned out horrible.  So now I am gun shy and do not want to get another bad tenant in, but I feel like the tenants my houses will attract probably will not meet all of my criteria.  I could've had both properties rented several times by now (and thus had enough to repaint the other house and rent it, too).

Thoughts?  What criteria do you all use for Class C rentals and/or dealing with Section 8?

You can get ANYONE to turn out to be a "Filthy Joe".  It's not just about being Section 8.

I like Section 8 because the rent gets paid. I have a "no pet" policy in all homes, except for one in which I installed ceramic tile throughout the home. As far as filth, you can do periodic inspections and issue an eviction notice or complain to Section 8 to get that resolved.

If you haven't already done so, sign up as a section 8 landlord with your local housing authority.  Check out the hud website and see what full voucher section 8 is paying. Advertise on craigslist.

Background, steady employment and rental history are most important to me.  Credit score, I'm not as concerned with.  I'm also a pretty good judge of character.

I have a phenomenal credit score right now.  However, when I'm debt free it will be horrible!  I've never agreed with our credit score system anyway. I don't want to start on that rant!

Don't get hung up on credit scores. If the credit score is on the low side, ask for additional security deposit to cover the extra risk. Make sure they have sufficient verifiable income and have made amends on any bad rental history. You may want to be more flexible with your screening criteria. You can do so and still cover your risk. For an example, you can take a look at our Rental Criteria which I downloaded into the BP File Place. We've rented successfully to folks with an "oops" in their past in both B and C properties, and to Section 8 recipients.

Also, contact your local housing authority Section 8 office and get your properties posted on their listings. Be sure to screen well... take a look at our Tenant Screening Questions, in the BP File Place, for ideas.

Most importantly, once you advertise, be there to take the calls, do the screening, and do the showing. Create a property information sheet for each house so when people take the time to view the property you can give them the info in writing. If they are looking at several properties you want yours to stand out. Be respectful and kind to all prospective renters. Expect the best and the best will find you.

If you are in a C- area, you need to lower your standards as far as credit score. In fact, a credit report is not that useful IMO.  Some of these people are going to be fortunate enough to have a checking account let alone a good credit score.  If they make enough money, are not a criminal, have no evictions and no money judgments, and have a verifiable rental history,  I would say that's about as good as you will find.  

Originally posted by @Jeremy Jackson :

Background, steady employment and rental history are most important to me.  Credit score, I'm not as concerned with.  I'm also a pretty good judge of character.

 I"m a pretty horrible judge of character, which is why I like screening "rules" to stick by.  When you say "steady employment", do you mean has always had a job, or has had the same job for at least a year?

Absolutely, establish your screening criteria.  For me, remaining at the same employer holds a bit more weight.  However, life happens and people change jobs.  Be aware of gaps in employment.  

@Amy E.

Amy I agree with the above. Don't give too much weight to the credit score. You have to look at the entire picture. A person could have a low credit score b/c of a short credit history, medical bills, incorrect information that's  never been updated, etc. If a person shows good employment history  (3+ yrs), good income (including section 8 b/c its guaranteed), a clean background check, can pay the deposit and has a good landlord reference,  I'd accept them. 

I've posted this in another post but I have a scoring criteria to avoid this. I score if a person  showed up to see the house on time, if they brought all items requested,  if they  completed the app in it's entirety, to how long they've been employed and how long they lived at the last residence. It takes away from having to decide based on just a feeling.

If you are concerned about getting a filthy resident you can always do a home visit before accepting them. I've done that before and works. 

Many section 8 offices have a a list or a web site with available rentals, get on that list.

The books Section 8 Bible Vol 1 & 2 have a bunch of tips from two landlords who owned hundred of section 8 rentals. 

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