I'm pretty new to Bigger Pockets and am working on my first property. I've listened to podcasts and YouTube videos on tenant screening but am interested to hear how you apply those to section 8 tenants. I have a 3/1 in Baltimore. Rent would be $1,400/mo.
Are you charging a full month of rent for a security deposit?
Income requirements - 3x's the rent (including voucher as income)?
Credit score requirement - 600+
All feedback is appreciated.
We use the exact same screening criteria for all tenants, section 8 or not. It's a good idea to have a written policy that you can reference if and when you are asked what your criteria is. We charge at least 1 full month of rent as a security deposit or more depending on credit history, income must be 3x rent (no exceptions), 680+ credit score ( we'll work with people on this one depending on their situation).
@Terri Smith , I charge $1000 security deposit. I do this because my average rent on a 3 bed is $1075 so it's close to 1 month. The difficulty with Section 8 is that you probably won't know exactly how much will be approved in rent until you're well into the process so you can't give the tenant a firm number if you're actually going off rent charged.
You could just set it at $1400 and if rent comes back lower, no big deal, it's still $1400.
Because the Section 8 process takes a little while (2 to 4 weeks in my market), I require half of the deposit at lease review/Section 8 paperwork signing and the other half on or before move in. If the tenant cancels occupancy due to something in their control, I keep the first half.
For Section 8, I require $1000 month in income (close to 1x the monthly rent) instead of 3.
I don't care about credit score. I do care about payment history for the last 24 months, eviction history, bankruptcies, monies owed to utility companies and of course landlord references. Very few of my Section 8 applicants have a credit score over 600. A few but not many.
Good luck - Section 8 is great when understood and executed well by the landlord!
@Jennifer Donley Thanks for the information. It gives me some things to consider to find the right balance in my screening criteria.