I recently had the pleasure of attending Section 8 “Landlord School” at our local housing authority. It was an educational meeting with an experienced Section 8 administrator. He ran us through the basics of the program. He also gave some really great advice for landlords. I definitely discovered some gaps in my screening and leasing process.
I would highly recommend attending one of these orientation sessions. They offer them twice per month. Even if you have no interest in renting to voucher holders, you’ll pick up some great tips. Plus, you’ll meet other aspiring landlords. Also, they’re free!
I can’t cover all the details of the program, but here are some of the higher level tips I picked up:
Do Your Own Background Checks
Recent changes to the way section 8 does background checks makes their process more forgiving on those convicted of crimes. The only crime that will keep someone off the program for good is if they’re on the lifetime “sex offender” list. If you want to avoid renting to criminals, the responsibility is on you.
Section 8 Doesn’t Read Your Lease
However, they do require a copy of it. They also require that a “catch-all” addendum be signed. This addendum essentially says, “anything illegal in this lease will not be upheld.”
There’s Been A Voucher Migration Towards East Birmingham
Being a data nerd, I asked for data on where the majority of vouchers are being signed. Where do people want to live? The general response was to the East side of the city. Centerpoint, Woodlawn, Roebuck were all named as favorites.
Section 8 Won’t Allow More Than Two People Per Bedroom
If you have a 1 bedroom condo, they wont allow 3 people to live there.
To truly cover all your bases when screening a section 8 tenant, you need to ask for…
The Voucher – This is the contract between tenant and Housing Authority.
The RAFTA – Starts the process of a contract between landlord and Housing Authority
The Rent Estimate – A preliminary indication of how much rent this tenant will qualify for. You want to know that their “voucher rent” will be close to your rental rate.
Do The Work On The Front End
Get the house ready to pass inspection. Screen tenants rigorously. Educate tenants on the lease and the house. Set the appropriate expectations from the beginning. This should lead to a smooth tenancy and a healthy working relationship.
Gosection8.com Is Incredible!
Gosection8.com is a huge asset to section 8 landlords and renters. You can post properties for free. They allow you to receive a lot of data and feedback from prospective tenants. You can even reach out to prospects directly!
It’s also the best free service I’ve seen for rental comps. If you want to check rental comps for an area, just type in the number of bedrooms and they will show you nearby properties that have been rented recently. I’ll definitely be adding this to my list of essential apps for landlords.
There’s An Intricate Calculation To Determine The Tenants Subsidy Rate
I think it’s good to understand how this process works. It allows you to know what your tenant will be expected to contribute. Basically, the housing authority can’t pay more than 40% of the tenants income in rent. Then there are a dozen adjustments based on familial status, health, etc. On average about 90% of the rent is covered by the subsidy.
Get A Security Deposit When You Sign Off On The Voucher
You are about to go on a 4-6 week process to get your property rented. You’ll have to take the property off the market, which is a risk. Collecting the security deposit up front allows you to offset that risk. Just be sure to lay out the conditions where they will and won’t get the security deposit back, and have them sign off on it.
Include A “Cleanliness Clause” In The Lease
Describe the problems that can come from a lack of cleanliness (roaches, grease fires, etc.). The majority of people already know this, but it never hurts to be reminded. It can help prevent these issues from negatively effecting their stay in your property.
The Section 8 Program Has An Attrition Rate Around 7.5%
There are many reasons someone may be removed from the program. Sometimes a tenant’s income increases above the level where they need government assistance. Sometimes there are issues with paying their portion of rent, or breaking lease terms. Either way, there is no shortage of new applicants waiting to be accepted into the program.