Screening Section 8 Tenants?

Question

I am seriously considering Section 8 for a home I recently renovated that is in an area of town that is still in transition in Atlanta. The good thing is I am not in a huge hurry to find a tenant. I will be scheduling my Section 8 inspection next week. And then I assume they will give me guidance on what I can and cannot do with advertising and screening, right? For example - I typically ask applicants to apply using Zumper which gives me credit score and eviction info. There is a small charge for the applicant. I also ask for past landlord info and call them and ensure they took care of the property. Is that OK for Section 8? I would appreciate any insights you have. I have been a landlord for 17 years, but this is my first time doing section 8. Thanks in advance!

Thomas Meyer · Answer

I have 4 SFH with section 8 tenants. Out of the four, three of them have been with me since the beginning, which was 8 years ago. The fourth house has had a few turnovers. For me, it was always about talking with them on the phone and meeting them. That being said, several applicants will tell you things you want to hear like they are going to stay forever, take great care of your house to include planting flowers out front, etc. Credit check is not really going to tell you anything. A call to their prior landlord is a great resource as well. I personally love the program...

John Underwood · Answer

No difference in the way you screen a section 8 tenant. I make them pay a deposit.

I lower my criteria on ability to pay since the rent is guaranteed by section 8 at least for their part. I find tenants stay a long time and take care of property reasonably well since they don't want to lose the free government money.

Kyle J. · Answer

You’re allowed to screen Section 8 applicants like you would any other applicant. And you should. Don’t skip some part(s) of your normal screening process just because they’re Section 8. Just do what you normally do.

Thomas Meyer · Answer

Also, at least in California, you screen the tenants as you like. Once you have selected a tenant, you turn in their voucher to the Section 8 Office, which will create an inspection date. Once the inspection is complete and it passed, the case agent will call you and ask if you will accept a certain amount, which is based on an income formula. Always ask for the full voucher amount when turning in your paperwork. Do yourself a favor and check the rent comps prior so you can negotiate a little bit because they will try and offer a lower amount. Sometimes they just won't budge.

Jason H. · Answer

@Melissa Uppelschoten I may represent the minority viewpoint in this discussion, but if you are not in a rush to get a tenant, I would hesitate before going the Section 8 route.  I have been there and no way will you be getting me back into the program.  I will copy a response below that I gave to another investor in another discussion as to why I do not recommend it.  Like I said, I may be the only one who feels this way based on my specific experience with the program and the program rules in ATL may likely be different where my properties are.  I know you’re going to get a gamut of experiences from different people, so I just wanted to give you mine, since it was not a positive experience whatsoever.

“I do not recommend going the Section 8 route whatsoever, from a short or long term perspective.  I know there are is a handful of investors who swear by it, but they are probably in a different market.  In PGH, it’s not worth your time.  There are so many hoops you need to jump through and so many inspections you need to pass in order to get paid by the program.  You need to spend a lot of money to get your property in compliance with what the program deems as safe and habitable conditions (which is beyond what any normal investor would think is reasonable).  There are annual inspections and if tenants damage your property and cause you to fail the inspection, they will immediately stop your rent payments until YOU fix them to a satisfactory level.  And even upon re-inspection, there is nothing preventing them from nitpicking and giving you a new list of issues you need to fix, thus putting you in a never ending cycle of repairing the property and chasing your rent payments that you will likely never get. If your property is not in compliance, the tenant also has the right not to pay their portion of the rent to you as well.  So they end up living there for free.  It’s not worth the headache.  Just put your property up on the open market and find yourself a great PM.“

Filipe Pereira · Answer

You should 1000% screen section 8 tenants the same way you screen any tenants. Not doing so could land you in hot water, especially if other tenants feel that you are giving others special treatment. Everything that you mentioned you typically do is fair and should be done with all tenants, regardless of their source of income :)

Melissa Uppelschoten · Answer

@Jason H.

Thanks for sharing your experience! I did a bit of checking around Atlanta. I actually found out a good investor friend is on the board of the Atlanta Housing Authority here, and thankfully we don't have the same stringent guidelines as you do in Pittsburgh. Hoping that doesn't change! But thanks again.

Melissa Uppelschoten · Answer

I am breathing more easily now! Thank you all!

Screening Section 8 Tenants?

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