Tony is exactly on with his description. Two things thought. Local Housing Authority as he mentioned can be the best or worst. Try and find some landlords who deal with them and see what their experience has been. 2nd you still need to screen the Sect 8 people just like a normal tenant. Credit reports etc. You’ll find good Sect 8 and bad ones.
Note: you can call you section 8 authority and ask for their “payment standards” or Fair Market Rent rates. They’ll give you efficiency rates, 1, 2, 3 & 4 bedroom rates. Only thing to remeber is the rates they give you include all utilities. This does not mean you have to include them and in fact I wouldn’t incude them if you can avoid it. They use more if your paying(typical). Also do not make side deals with the Sect 8 people. Many will try and get you to do things like say your paying the electric but really they’ll reimburse you. This isn’t legal and get you both in trouble.
Im thinking of getting into section 8. I have read the archives but Im not quite certain as to how it all works - exactly. Section 8 is for lower income families correct? What type of application process applies for someone wanting to live in a section 8 housing?
I mean, form my standpoint, as the owner/landlord, how would I know who to accept and why? I wouldnt think that there would be credit reports or checks needed. Just maybe a copy of their tax forms or aomething right? Or does it not work that way?
Section 8 Housing (Long post) - Posted by Tony Colella
Posted by Tony Colella on May 25, 2005 at 07:09:00:
Although Section 8 is a federally funded program, the local housing offices have a great deal of autonomy. Each office runs a bit different than the others but under the same basic guidelines. For a landlord, the effectiveness of the program tends to come down to how reasonable the local administrator is when dealing with landlord and tenants. I have found that our area office is reasonable and fair. Investors nationwide have described section 8 administrators in their areas as very, very difficult to work with.
The process in our area begins with the tenant. They bring us a copy of the voucher that tells us if they are allotted the rent we are seeking (expressed in a rental range depending upon what the landlord provides). They will have a packet consisting of several pages that the landlord must complete. Most are tax forms and some are for the landlord to list what, if anything is included in the rent.
The tenant then takes the packet back to the housing office. The office will schedule an inspection. Follow up inspections here are done on an annual basis. The inspector will determine how much rent they will provide us. This gets a bit confusing because it does not mean that this is the market rent. The inspector uses a formula which takes into account market rent, utility costs to the tenant and the voucher allotted to that tenant. The formula determines the rent. You can either accept it or decline.
If you accept, section 8 begins prorating the rent as of that day. In our area, the tenant signs a 1 year lease with section 8 which we also sign. The tenant also signs our own lease. After 1 year, the tenancy returns to a month-to-month tenancy.
Section 8 often pays a lion?s share of the rent with the tenant paying a small portion but in some case, section 8 pays the entire rental amount.
Section 8 is in such demand by tenants in our area that there used to be a 3 year waiting list. Now they have discontinued accepting new applicants altogether. This places the landlord in a stronger position as a tenant is less likely to damage the home or break the lease for fear of losing their voucher.
The section 8 program is designed to be win/win which may mean that you may not get everything you want. Sometimes rents are a bit under market, others they are a bit above. The lower vacancy offsets any minor amount of rent received that is less than market but draw your line in the sand. You do not have to accept that particular tenant. You still have the right to screen tenants just as your normally would. You still accept a security deposit just as you normally would. Just because you are using section 8 does not mean you no longer screen you tenants.