What is a section 8 tenant? - Posted by Richard

Posted by Richard on July 18, 2002 at 12:28:21:

Thanks a lot Dave!

Richard

What is a section 8 tenant? - Posted by Richard

Posted by Richard on July 16, 2002 at 13:28:33:

Hi all,

Sorry if this question seems too simple… But I always heard people saying they get a section 8 tenant in their rental, and it seems there is some advantages for the landlord.

Can someone please explain what is it and what advantage/disadvantage to put a section 8 tenant in your rental house.

Thank you.
Richard

Re: What is a section 8 tenant? - Posted by Dave T

Posted by Dave T on July 16, 2002 at 14:13:14:

I have a couple of Section 8 tenants in my properties. The Section 8 Voucher program is a HUD subsidized housing program that helps poor, elderly and disabled people rent decent housing.

This program lets the tenant decide where to live. Each month, the tenant pays a portion of their income (up to on-third, I believe) toward rent and utilities, while the government pays the rest of the rent up to a certain maximum amount. The government sends their portion of the rent directly to the landlord, the tenant pays, as their share, whatever is left over.

Your property must pass inspection before it can be approved for a Section 8 tenant occupancy. Any repairs required to meet approval must be made, and a new inspection requested before approval is granted.

Rent increases must be approved and the amount of the increase may be limited by the local housing authority that administers the Section 8 program. Maximum allowable rents are determined by an area market survey.

I have never had an issue with cleanliness. I have one tenant that has always been late with their portion of the rent though the rent has always been paid during the month. The government paid portion of the rent has always been paid on time.

At one time there was a full subsidy program, but in my area that has been eliminated. Only the voucher program is available at this time in my area.

Re: What is a section 8 tenant? - Posted by Richard

Posted by Richard on July 16, 2002 at 16:47:48:

Thanks very much Dave!

So, is the allowable rent meets the market level, or it seems to be lower than the market level.

With so many restrictions, do you prefer to have section 8 tenants or other regular tenants?

Thanks!
Richard

Re: What is a section 8 tenant? - Posted by Dave T

Posted by Dave T on July 16, 2002 at 17:55:46:

I have had several Section 8 tenants over the years. In my experience, Section 8 tenants are more stable tenants, so my tenant turnover is reduced. Several years ago, I had one Section 8 tenant stay in my property for 6 years, in an area where I am used to turnover every two years.

I never defer maintenance, but often I must depend upon my tenants promptly reporting minor items that need repair and not wait until my annual inspection. My Section 8 tenants tend to report repair items more promptly than my other tenants. This helps me keep my properties in good repair and avoid more costly maintenance later because the tenant ignored a small problem until it got bigger.

I tend to set my rents a little less than the market highs. By doing so, I reduce the vacancy period whenever I have turnover and usually receive multiple applications for a vacant property. Because my rents are a little less than the market highs, I have never had any rent rejected by the housing authority. Once I even had the housing authority tell me what rent increase they would allow (which the tenant could still pay) and it was a higher increase than I was going to propose.

I don’t actively solicit Section 8 tenants. But if I had two applications – one Section 8 and one not – and both tenants were otherwise equally eligible, I tend to give preference to the Section 8.