Whether you are just starting out as a landlord or have been in the business for some time, chances are you have considered renting to Section 8 tenants.
Renting to Section 8 tenants provides a host of benefits. They include:
- Pre-Screened Tenants: To qualify for Section 8 housing, tenants must meet certain requirements. For instance, they must not have been evicted within the last three years due to drug-related activities.
- Consistent Tenant Base: Section 8 vouchers are always in high demand across the country. So much so that certain areas have thousands of people on the waiting lists longing to be on the program.
- Targeted Marketing: There are marketing opportunities both online and in person if you decide to make your property Section 8 friendly. They are all free.
- On-Time Payments: Renting to Section 8 tenants provides the benefit of receiving consistent rent payments each month. The Public Housing Authority is responsible for paying the tenant’s housing voucher directly to you every month.
Clearly, with these benefits, it isn’t hard to understand the appeal. That said, there are certainly some drawbacks to renting under Section 8. So after listing some of the pros of renting to section 8, today we’ll discuss some cons of accepting Section 8 tenants. Read on to find out.
6 Common Problems Landlords Face When Renting to Section 8 Tenants
1. Frequent Yearly Inspections
This is a responsibility that you’ll have to deal with if you decide to provide Section 8 housing. An inspector from your local Public Housing Authority will come to your property once every year to carry out an inspection.
Do note that the inspection will be done regardless of whether there is a tenant or not.
The goal of the inspection is to check whether or not your property meets U.S. Department of Housing and Urban Development (HUD)’s health and safety standards. The areas and facilities they will inspect include smoke and electrical detectors, water supply, lead-based paint, and the sanitary system.
In total, there are 13 areas. And all these 13 must meet certain requirements. The “sanitary facility”, for example, must be situated in a private area and must only be available for use by the home’s occupants.
It’s not rare to fail in any one of these 13 areas. A hot water leak in your bathroom, for example, could cause potential burns to your tenant. Which could cause you to fail the inspection.
If you do fail the inspection, you as the landlord will be given time to make the repairs before any future inspections.
2. Section 8 Landlords Have a Rental Price Limit
The Section 8 program is designed to help lower-income individuals afford housing. As such, there is a limit to what you can charge your section 8 tenants.
HUD considers these four main points as the criteria for setting the amount of the Section 8 voucher:
- Allowance for utilities
- Tenant portion
- Payment standard
- Fair market rent
Generally, the amount ranges between 90% and 110% of the Fair Market Rent.
3. Delay in the First Rental Payment
This is another problem you may face if you decide to rent to Section 8 tenants. Usually, the Section 8 office will not pay until after the renter has moved into your property.
There have been some cases, due to administrative backups, where landlords have had to wait for as long as 4 months to get their payment. However, once you get the first payment, the next payments will be consistent every month.
So, before you consider renting to Section 8 tenants, make sure you have the financial capability. You may end up waiting several months to receive rent.
4. Potential for Difficult Tenants
Dealing with difficult renters can be time-consuming, no doubt. And for many landlords, especially those that are just beginning or those who lack the experience, it’s an unfamiliar and potentially risky territory.
After all, landlord-tenant laws can be quite complex. Sometimes navigating them can feel like a minefield.
Section 8 tenants are usually perceived to be in a financial bind. Some may still have difficulties paying their subsidized rent.
Many people, for example, that qualify for the housing subsidy are unable to hold a job. This could be due to health issues, disabilities or old age.
Due to this, they may, understandably, be unable to cope up with your property maintenance standards. Also, such renters tend to require more assistance and safety features all through their rental period.
5. Longer Eviction Process for Section 8 Tenants
Evicting a tenant is a situation that no landlord wants to go through. That said, it’s a process that you’ll inevitably experience at some point in your career as a landlord.
Just like with any other tenant, you’ll need to follow state and local eviction laws when evicting a Section 8 tenant. However, with Section 8 housing, you’ll have added work of sending copies of documentation to your local housing authority office.
The documentation includes copies explaining the violation as well as the notices issued. In addition, some states require that landlords get permission first from the housing authority prior to filing an eviction lawsuit in court.
In most cases, though, Section 8 tenants will try to fix the violation before the issue becomes serious. This is because they are more than likely to lose their voucher if they receive a court eviction order.
6. More Chance of Wear & Tear in Section 8 Housing
This is another common Section 8 housing landlord problem. There have been horror stories about garbage and filth everywhere, toilets being cracked, cabinets being pulled off the walls and floors being destroyed.
All these problems can certainly happen. Nevertheless, they aren’t unique to Section 8 tenants. They can happen with any tenant you rent out to.
That’s why savvy landlords always insist on a fair and thorough screening process regardless of the tenant type.
These are the 6 common problems landlords face renting to Section 8 tenants. Generally, renting a property has its pros and cons. But, when considering offering Section 8 housing, these are the issues you should beware of.