renting Section 8 property

12 Replies

I plan to buy and qualify a SFH for Section 8 rental. Once the SFH qualifies for Section 8, can I still rent it out to non-Section 8 tenants? In other words, should Section 8 property only accept Section 8 tenant? Thanks.

Hope you get a more accurate reply than mine but getting it section 8 approved shouldn't limit your tenant acceptance & my guess is that it would only help & add more possible applicants/tenants. Never heard of "section 8 only". 

If you can rent it out to non section 8s why bother jumping through the hoops to get approval. You will be renting to lower quality tenants with S8. Take the best/highest qualified tennats you can find.

Hi @Dev Penna ,

This is just my personal experience but if you can take the time to qualify for a section 8 tenant then it best to start out with them. One reason is that they will be more stable than regular tenant. Of course most likely you will receive lower rent from section 8 but it will reduce a lot of risk as well. My family started renting out in 2009. The first few years were great. However, within the last 3 years we had to do 3 evictions. Each one costing us upward to $8,000. Even a tenant that lived in our of our properties back in 2009 caused trouble and got evicted. Section 8 not only keep the tenant in check with keeping the property in good condition but they also limit the number of people that can be living under one roof. This will help reduce your maintenance fee as well. And since they are stable vacancy rate might be reduced. Anyway, if I have to go back in time I would try to qualify all of our tenants through section 8 so that the income stream is more predictable.

Good Luck,

KH

I market most of my units to both Section 8 and non... In my city there is an initial registration process for yourself / your entity as a Landlord in the system and then the property inspection happens after you've approved an applicant with a voucher for the home.

I have no problem finding an S8 tenant that qualifies in all other ways besides income and I've never had to evict an S8 tenant who knows they were lucky to find a place as nice as mine that accepts S8 vouchers. They are less likely to leave a nice place, so vacancy is low and my rents are all at matket rate. Just screen well and inspect quarterly or bi-annual at minimum.

Most of my tenant problems (such as late rent) are for the non-S8 tenants due to breakup or job loss - which are not often issues for Section 8 Tenants. I find them to be all around more stable and predictable and you have the potential hammer of voucher loss to discourage problems. I've had only 1 S8 tenant leave in 3 years and the agency first contacted me to get report of tenant in good standing before approving the move - great protection... I even find inspection process to be easy here, although I hear that's not true everywhere.

J.T.

Originally posted by @Dev Penna :

Thanks for reply. Section 8 is my plan B, and I believe there are good quality tenants in section 8 pool. 

 I think you should try to find good tenants out on the open market. If they're not there then go to S8

@Dev Penna - My screening process is the same for S8 and non-S8... Of course it includes credit and background check, but income is less if not completely irrelevant for S8 and credit score is most often poor. I still review the credit because I am concerned with non-medical and non-student loan related collections, as well as, liens or judgments... anything that suggests a willingness to take things all the way to court.

Also small collections might show a lack of concern to handle even small bills property, which S8 tenants often pay a very small portion of their rent. If they'll let a $100 phone bill go to collects and ruin their credit they'll also neglect to pay their ~$100 portion of the $1,000 rent. I also look to see who recent credit inquires are from, such as payday or other high interest lenders.

But I eliminate most potential problem tenants before they even apply by the way I handle communication from the very start... When they call to inquire about a unit, I require they send email with specific information present to get an automated response about the property with a link to how and where to apply. I consider how well the call goes and how many times must I give the email address? Does the email received contain the indicated information as directed? Is it properly written or text shorthand gibberish? I must make sure that I do not end up with a tenant that I cannot well communicate with through our email / ticket system.

The automated email sent contains a highlight of our important policies for which each bullet point ends with text something like - "... VIOLATION WILL RESULT IN EVICTION". I never hear back from most who inquire as they are eliminated or scared away by this point. One person recently responded after getting that automated email to state they are no longer interested because "it appears you can get evicted for breathing too hard". I replied to thank them for their interest, but it also means the email served its exact purpose of self-eliminating those who are likely to  conflict with my policies.

That email has specific actions the person must take to continue, so it shows they can follow directions. I also conduct reference checks, former landlord checks, personal interviews, even social media review. It's a lot of work up front, but the end result is a tenant who is unlikely to cause problems. When combined with a desirable product and a professional demeanor, it works - and my tenant problems are few. I have a list of person's wanting to be notified of my next available property.

S8 is a viable option for hobby landlords that are not concerned with maximising returns on their investment. It is however entirely dependant on th elocal government handlers regarding dependability of tenants. Over all S8 is much more hands on management wise. Most S8 are untrainable and require constant monitering.