Section 8 Tenant ‘crisis’

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Hi All, I recently BRRRR’d a 4 bedroom SFH in Pittsburgh and had section 8 tenants move in at the end of Dec. The property was approved for section 8 but we have just recently found out that the tenants no longer qualify as their income for 2017 was too high. The tenants cannot cover the full rent on their own and I had to chase them down for their small December payment amount that they owed. Anyone ever been in a similar situation? Anyone able to offer any words of advice? Kristina

Eek, yuck, ouch!  Sorry.

I have zero experience with section 8 but it seemed (no longer) to me that the ONE saving grace of Section 8 was it's ability to ensure consistent rent payments.  If Section 8 recipients no longer qualify, after moving in....  And that's a risk - well, seems to be the nail in the coffin for me in terms of evaluating Section 8 as a viable investment option.

Would be curious to hear if this happens / has happened to others?

Sorry about the trouble.

How did this end up turning out? I'm trying to learn more about the Section 8 process after the battle in the city to try and force landlords to accept it within city limits

Hi @Kristina Inglis ,

I manage over 10+ Section 8 tenants and have come across many scenarios. If you already know tenants cannot afford the full rent without the assistance it would be best to serve them a lease termination notice (according to what your lease agreement states). Our lease states we can terminate a lease as long as we provide 60 day notice to the tenants. 

Serving a 60 day notice is a less aggressive approach to try to get the tenants to vacate the home without going through eviction. If they do not abide by the 60 day notice lease termination then unfortunately you will have to start the dispossessory process.

I would encourage to spend more time and energy finding a tenant that qualifies and is financially stable to pay the rent so you are receiving the full revenue for your investment. 

Hope this helps!

I had something like this happen in Oct. 2017.  I inherited this tenant and she'd been my tenant for over 2 years.  S8 had been paying 90%-100% of her rent, depending on the year.  Then two of her dependents aged out (though they were still living there) and her very p/t job went to f/t.  All of a sudden, her portion of rent became about 75% of it.

I called her case worker concerned that, even with a higher income, this drastic change wasn't going to be something she could handle.  Of course, there wasn't anything he could do about it other than to say "whelp, that's what our formulas show".  She did pay her portion of the rent every month...eventually.  But, without fail, every single month I had to chase her for it.  Posted 5 Day Pay or Quit notices multiple times.  And every, single month it was 1-2 weeks late.  Plus, she was usually awful to deal with and had a selfish, entitled attitude.  I finally had enough and gave her a 30-Day (45 days actually) notice to vacate in July 2018.  I had the epiphany of "What the heck am I doing!?!  Why am I putting up with 100% of the hassle of S8, when I'm only getting 25% of the easy rent."  If I'm going to chase a tenant for rent anyway (I don't anymore), it might as well be a non S8 one, lol.  Of course, she didn't comply with the notice and, in the end, I had to take her to eviction court anyway.