RE: Section 8
Each city has there very own section 8 laws, you can easily find and city HUD contact information with a quick search. If you have never done section 8 before make sure that you are prepared you will want to make sure that you and your property are fully taken care of in the lease. I have see landlords crash and burn because they wanted to try it to help out and get some of the perks like tax deductions. They found their properties destroyed. If done correctly it may be worth it but do all of you research and make sure each tenant and even occupant has a background check carried out on them.
Posted by
Patty H,
on
Tuesday, February 17, 2015
RE: Section 8
Section 8 will require an inspection on the property. They have very specific requirements about what is allowable under their guidelines. Get the inspection BEFORE you sign a lease with a prospective tenant. That way you know what Section 8 may require you to fix/alter/replace, etc beforehand. It could become very costly to place a Section 8 tenant based on what the agency whats done to the property. I've had Section 8 tenants. It is nice knowing that you are GUARANTEED to receive your rent from the agency but the tenants themselves can be a bit more work. Stay on them and make sure they are maintaining the property.
Posted by
HRS R, PA
on
Wednesday, February 18, 2015
RE: Section 8
Very useful information. Thank you both!
Posted by
Judith M, GA
on
Wednesday, February 18, 2015
RE: Section 8
Judith, I always open my properties up to Section 8. But, as the others have mentioned, it comes with its benefits and pitfalls. There are a lot of great section 8 tenants out there. Statistically, the average section 8 tenant will stay in a unit for 4.5 years. This is about double the time of a non-section 8 tenant. Here is the section 8 process -
1) post your property on GoSection8 website or on other sites like craigslist state that you accept section 8
2) Tenant applies to rent your unit
3) Landlord does normal background and credit check just like with every other tenant
4) If you determine that you would like to rent to the section 8 tenant then you have the tenant sign the lease but leave the rental amount and lease start date blank.
5) Take the signed lease to the the HUD. You need this to schedule an inspection of the property
6) They will usually take 2-4 days to schedule and have an inspector out to your property. They will check for things like making sure all electrical is correct, each socket has a plate guard, light switches work, heater works, windows all have locks on them, doors all have locks, entry and exit doors have dead bolt and handle lock, and all appliances work properly. And most importantly, that the price you are asking for the unit is market rate and not too high.
7) If you pass the inspection, then you sign a lease agreement with the city housing authority and complete the lease with the tenant
8) The tenant pays their portion of the security deposit and lease and moves in.
9) the split for the tenant's obligation and what the federal gov't pays depends on the income of the tenant. They are required to pay up to 40% of the gross income in rent/rental costs. So if they make 12,000 / year then they are required to pay $400 / month in rental expenses which means maybe they pay $200 to gas, electric, and water company and they pay you $200 each month and the rest is direct deposited to you on the 1st of every month.
That being said, if the rent in your area for a 2/2 is $800, you can usually ask 10-20% more than that and still have the housing authority accept your rental rate. In this case, if you were able to charge $1000 / month for rent then you would get the $800 every month guaranteed by the Federal Gov't. Then the extra $200 / month is somewhat of a bonus. But, keep in mind that with section 8 you usually have to spend a little more $$ for fix-up upon moveout. It all comes down to getting a good section 8 tenant. If you can find one, you can have a great situation.
Hope this helps,
Thomas
Tenantopia, Inc
Tenant screening and online application tool
Posted by
Thomas H, CA
on
Friday, February 27, 2015