Should I Allow Section 8 in My Rental?

For landlords, the approval or disapproval of using section 8 is about 40% approval and 60% disapproval. The approval group says it’s great because the landlord gets a guaranteed payment each month; the disapproval group says it’s issue is the the quality of tenant can be a smaller pool to choose from.

Having said that; most of the blame can be set at the landlords feet who did not do their due diligence on evaluating the prospective tenant’s application. A Section 8 tenant is no different than a regular tenant in that you need to review their application references, rental history, and criminal record.

What is Section 8 Housing?

The Housing Choice Voucher Program, also known as Section 8, is the federal government’s program for assisting low-income families, the disabled, and the elderly afford housing. Participants can choose housing that meets the requirements of the program and receive housing vouchers to help with their rental costs.

This Federall funded is designed to assist low-income households by providing rental assistance that is based on household income.  The assistance is paid directly to the landlord once the assisted unit has been approved and contracts have been approved.

Do Section 8 Tenants Have to Pay a Portion of Their Rent?

Not all section 8 tenants have to pay a portion of their rent, but some will have a token very small amount (like $30 or $40) that landlords will have to collect separate from the payment sent by the Section 8 Housing.

Section 8 is Federal Assistance

Side note from Editor:

Rather than saying “yes” or “no” to section 8, I’m going to give you the pros and cons for both.

The good point to section 8 is that you will get paid promptly every month. And, you have a never-ending supply of applicants.

Now, here’s the bad part. If the tenant damages your place, section 8 will not pay for it. They used to, but they ended up paying so much that they discontinued the practice.

Also, many of the section 8 tenants are required to pay a very small portion out of their own pocket. Sometimes a mere $40. And you will be chasing your tail trying to collect on that measly $40.

Think this through as well; if your tenant isn’t working and they blow you off, damage your property, aren’t clean and you kick them out; how are you going to collect on the damages? Further more, if they feel unjustly removed; because they are lower income in some areas they have access to free legal council.

I myself have not had much luck with section 8, but I know of some investors who have.

Summary – Treat Section 8 tenants like any other applicant. Just because your money is guaranteed from section 8 doesn’t mean the tenant will be a good tenant. You need to do your usual due diligence and call prior land lords, credit checks, etc.

Why You Should Get tough with Section 8

I don’t mean the tenants, I mean the actual administration. They can nickel and dime you with petty things before the tenant moves in.

One time they had a whole list of items for me to “fix”. Some were legitimate, but most were not.

I got tough with them and said, “look guys, I will do these, but not these, if that doesn’t work for you then your client needs to find another place that will work.”

They backed off, did some sputtering, and their client was in. (I eventually had to kick her out, but that is a whole different story.)

If you decide to use section 8, do let me know – and if you’re a present landlord tell me your history – others would love to get your advice.

Does Section 8 Pay a Tenants Deposit?

Section 8 does not pay for a tenants deposit. Don’t be tempted to reduce the deposit amount just to get a guaranteed payment each month. Successful Landlords know a deposit is an important way to prevent damages and ensure a tenant follows the rules. That makes it a better place for everyone.

What All, if Anything, Does Section 8 Cover for a Tenant?

The only portion Section 8 pays is the tenants actual rent. They do not cover a deposit, damage, or utilities.

Who Screens the Section 8 Tenant?

The landlord has the sole responsibility of screening a tenant. Section 8 only evaluates their financial needs and how much the potential tenant will need for assistance. Because it’s the landlord’s responsibility they should do the complete validation such as credit check, income verification, references, rental history, and criminal record.

Can I Charge More Per Month Rental For a Section 8 tenant?

While you might be tempted. Don’t do it. You need to treat your Section 8 tenant like any other tenant.

You cannot charge more for your Section 8 tenants. You can have your normal rental variances, such as lake view, but you cannot charge more based solely on the tenant being a Section 8 participant. That is applicable to the deposit and the actual rental cost.

If you have a variety of rental costs, do discuss it with your lawyer to make sure you’re in compliance with your area.

Can I Charge a Higher Deposit for a Section 8 Tenant?

There are various reasons to charge more deposit for a tenant; example could be credit score or pets. But you should not charge a higher deposit just because a tenant is Section 8. The best way to avoid any possible aligations of not handling a section 8 like any other tenant is to have a written policy on how deposits will be determined.

Speak to your lawyer to make sure what is appropriate for your area.

What Does Section 8 Look for When Inspecting the Property for a Tenant?

According to Section 8 “The Housing Quality Standards are established by the federal Department of Housing and Urban Development. HUD requires that all assisted units meet this minimum standard to ensure the unit is decent, safe and sanitary. All things in the unit should be working and operable, as designed.

The requirements create a minimum standard. Most units in good repair should meet this minimum standard and pass the inspection. All systems in the unit should be operable and in sound condition, including electrical, plumbing, lighting, windows, doors, floors, roofs, etc.”

Your area may have other standards in addition to the rather simple ones established by the Housing and Urban Development.

How often is a Section 8 Inspected?

A section 8 is inspected based on its local jurisdiction; but in general – it will be once every 24 months, and of course, at the time of original contract negotiation.

Does a Section 8 Tenant pay for Their Own Utilities?

A Section 8 Tenant is no different than a regular tenant in regard to utilities. If other tenants pay electricity and the landlord pays water and garbage, the expectation is that you would set up your Section 8 tenant with the same arrangement.

It should be noted that a Section 8 tenant does not receive any utility assistance from this program.

Can I charge a Section 8 Tenant More Rent Off the record?

According to Section 8 you cannot charge a tenant outside the lease agreement contract. To do so can cause a termination from the program for both parties.

Here is what they say “The tenant cannot, nor should they be asked to pay additional monies outside of the lease agreement and contract. This violates program rules and guidelines and subjects both parties to termination from the program.”

Don’t accept money outside Section 8

How Long Can a Tenant Be in The Section 8 Program?

A tenant is not limited to a specified amount of time. Their eligibility is determined by their income or other criteria, such as disability and age.

This of course, means you can have a tenant who qualified and then no longer qualifies.

Can The Tenants Assistance Amount Change?

According to Section 8 the amount of coverage, since it’s income driven, can change depending on the earnings of the tenant. Section 8 notifies both tenant and landlord of the change with at least a 30-day notice to both parties.

This means the amount you have to collect from your section 8 tenant can fluctuate.

This is what they say “Yes, the amount of rent the tenant pays is subject to change. The amount of assistance a tenant receives is based on their income. As their income fluctuates, a tenant’s rent can also fluctuate. The participant and landlord will always be provided with a minimum of thirty (30) days notice of a change in the tenant rent share. If the tenant’s rent share goes up or down, the amount of the rent you receive from the Housing Authority will also change so that you still receive the total agreed upon rent.”

What Do I Do if My Section 8 Tenant Owes Money or Causes Damage?

Treat a Section 8 Tenant like a regular tenant and go through your normal legal eviction processes or small claims. While Section 8 will not cover these costs do know that there are a few states that will assist landlords.

Check with your state. For instance, my state has a Landlord Mitigation program specifically to address this.

Can I Sell My Property Which Has a Section 8 Tenant?

Your property is your property and you can sell as you wish.

When the property changes hands the new landlord and tenant will both be establishing a new contract with Section 8. The process will be just like the first process with the first owner. Most likely, this will include an inspection and, of course, new forms.

How Do I Terminate a Section 8 Tenancy?

To terminate a Section 8 tenancy you have to go by your State, County and City regulations like any other tenancy. The only difference is, the Housing Authority handling your Section 8 may require that you file all notifications with them as well.

Speak to a lawyer on the specifics in your area.

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