At first glance, renting to tenants who are receiving section 8 may seem like a no-brainer. Afterall, a guaranteed rent check that’s never late gives us landlords that warm fuzzy feeling. However, what’s the catch? Is it really a good idea to rent to section 8 tenants?
A quick internet search will quickly give you more than enough opinions on the topic. You’ve got some landlords that love renting to section 8 folks, and some that will never do it. The answer to the question really boils down to your risk-tolerance. Here are a few things to consider before deciding on whether to sign a lease with someone who has a section 8 voucher.
A Tenant’s Section 8 Status May Change
There is no guarantee that your tenant who started off with a section 8 voucher will continue to get that voucher. This reality alone makes the decision a tricky one. Many individuals and families who are on section 8 can’t afford to pay rent without assistance, so losing their voucher could put you and your tenants in a not-so-comfortable situation.
Housing Quality Standards
Another factor to consider is that the agency that governs section 8 (HUD) along with the local public housing agency (PHA), will have a list of Housing Quality Standards that your property must meet before it can be approved for section 8. Some landlords don’t want to adhere to these guidelines and choose not to accept section 8 for this reason alone. However, if you’re particular about the condition of your rental properties, then you may only end up with a small punch list from the HUD inspector.
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Lots of Paperwork
If you don’t like paperwork, then you’ll probably find working with section 8 tenants a pain. Section 8 paperwork usually needs to be filled out yearly (or so it seems in my experience), so expect paperwork.
Possibly the biggest reason landlords choose to accept section 8 tenants is because they get a guaranteed rent check. The government does pay on time, and you can even set up direct deposit to save yourself a trip to the bank. Keep in mind that while there are some folks who get 100% of their rent paid by section 8, in my experience, section 8 tenants usually pay a portion of the rent.
Screen Your Tenants Well
Section 8 not – you should always screen your tenants well. Always look for patterns. You should check credit score, eviction history, landlord history, and even do a criminal background check. While section 8 tenants will likely be low income, you should at least verify that they have enough income to cover utilities and their rent portion if section 8 is not covering 100% of the rent. So, is renting to section 8 tenants the right choice for you? Here’s a great link for more info on Section 8.