Section 8 Tenents

[cfc]

Has anyone had any experience renting out to section 8 tenents? I don't know if it goes by the same name in other states, but basically it's a housing subsidy for low-income renters. I've had a guru tell me not to rent to them b/c they are too much of a hassle (city has to inspect once a year and approve), but I've also heard that they always pay on time since most or all of the rent is from HUD. Also, do you give breaks for security deposit on these folks or not?

Any guidance would be appreciated! :praise:
Joe

[Aldo]

Before coming to my senses, I have to admit that I did rent to Suction 8 tenants. Let me also say that I never, not once, had a bad Suction 8 tenant. My problem, which varies from one area to another, was with the administration of the program. A classic example is waiting three months (not days or weeks) for a case worker to return my call about a lease renewal issue. To save time and to deprive you of a huge laugh, I'll leave it at that.

Your guru only hit the tip of the iceberg. Yes, you are subject to annual inspections as a condition of lease renewal. Your guru apparently failed to mention the lead paint inspections, which are part of the annual inspections.

Yes, the HUD portion of the rent is always prompt. If the tenant's portion of the payment is late/unpaid, you have a lot of hoops to jump through to evict.

I guess I could ramble on for hours. The bottom line is that I would not accept a Suction 8 tenant ever, even if the local administration was (rare) landlord-friendly. If you ever need legal justification for rejecting a leech (I mean Suction 8 applicant) , I can offer acceptable suggestions on ways to choose between the deadbeats and the ones who need and deserve subsidized housing.

[cfc]

It seems like you've had a terrible time with the HUD admin. I'll stay away, but one question: what about houses that were built after 1978 and are not subject to the lead paint disclosure. Do they still have to undergo lead paint inspections?

Thanks for the warning. You've probably saved me much headache! :thumbsup:
Joe

[Aldo]

I'm not sure about lead paint inspections in post 1978 properties; however, if your property(ies) are post 1978, I doubt you'd have to be concerned about that inspection, if it happens.

I'd like to add that you shouldn't rule out Suction 8 based on my experience or opinion. I know landlords in several parts of our great country who are very happy with the program in their specific area. You might want to seek out owners who accept Suction 8 in your immediate area to get their opinion of the local administration.

[Jim Johnson]

In Colorado with my section 8 rentals I always include the utilities in the rent. The state will give the renter MUCH more than what utilities actully cost. I dont know why but gotta love the system....

[Dan Auito]

Jim are you saying that the housing authority will in turn just give you those funds instead, without any receipts to document actual usage!

[Jim Johnson]

Dan,
Actully the housing people at the state will say, we will give these folks $900 per month if no utilities are paid, and $1200 if they are. Average utilities throughout the year might be $150 or $175 per month. It becomes a no brainer. No bills, no average usage, nothing. They must have a table of some sort that figures out what a 3 bedroom 2 bathroom home uses. The magic of state funding....


Jim are you saying that the housing authority will in turn just give you those funds instead, without any receipts to document actual usage!

[jpopkin]

I think you pretty much go the message above... I would like to add section 8 can be great for some folks, I have a client who owns 3 properties all units rented to section 8 tennants and is able to just landlord full time. Works great for him.

Just know what you are getting into.

We have an area of town here in the suburbs surounded by 400k+ homes and a golf course, but this neighborhood has 30 4 plexs that were 90% section 8 housing. When the rental market took a dip here a year ago section 8 deemed fair market rent to be 825 for the neighborhood(down from 1200). Now keep in mind that the rest of the county is 1220 but this 1 neighborhood is 825 no matter how nice you make the units. As a matter of fact the owners spent 25k per building last year improving the outside and some completely renovated units still 825. We are now working with owners to condo, and have sold out 1 building.

Another fun one a client of mine had a section 8 tenant move in, sign a 1 year contract, and signed a 1 year contract with section 8. The tenant just left after 2 months. Section 8 states that they are not responsible for the rent if the tennant is not living there. So there is really no recourse except to file a judgement on a person that has no money and no assets.

Bottom line, Its a 1 sided contract, and you give up a lot of control when renting to them.

[Aldo]

Jason made a good point. Another factor that changed a few years ago is the Security Deposit. Formerly, no deposit was needed because Suction 8 paid for damages. Currently, you need a full deposit because Suction 8 no longer pays for damages - financial or otherwise.

I'd also add that, if Suction 8 will not pay your required rent, you can appeal their alleged maximum allowance. The only real requirement is that you can show other identical rental units in the immediate area which rent for the same price as yours. I did that several times and won the appeal every time.