Guide For Landlord To Go Section 8 2018-12-11 22:40:30

What is Section 8?

Section 8 is a program designed to help American citizens with low income by assisting them with rental payments. Section 8 is funded by the U.S. Department of Housing and Urban Development and has two branches: Housing Choice Voucher and "project-based" program.

The Housing Choice Voucher ("tenant-based") gives the tenant an opportunity to choose a housing location. The "project-based" assistance, however, requires a tenant to live at a specific property.

Types of Rental Properties Included in the Section 8 Program

Section 8 offers a wide selection of properties that Section 8 tenants can rent based on their preferences. These are some available properties for rent if you go Section 8:

  • House

  • Single family home

  • Townhouse

  • Apartment

  • Condominium

  • Duplex

  • Triplex

  • Fourplex

  • Mobile Home

     

Benefits of Becoming a Section 8 Landlord

  • The rent is paid by the U.S. Department of Housing and Urban Development (HUD), so you can rest assured that you will get your rent money. The executives of the government will mail the check to you or directly deposit to your bank account.

     

  • By becoming a Section 8 landlord, you certainly won’t have much trouble with the tenants. All the tenants are pre-screened by the Section 8 Housing Authority. As a landlord, you won’t have to worry about your tenants doing drugs, participating in criminal activity, or even eviction. Tenants must have a clean background to access the Section 8 Program. They must meet all the requirements if they wish to be included in the Section 8 program.



  • You can charge the rent anywhere from 5 to 15% higher than the current rental market within the same area. In addition, you can raise the rent from 3 to 6% per annum.



  • The Section 8 Housing Authority sends inspectors to inspect your rental unit every year. That way, the unit will meet the living conditions and safety codes at all times.



  • Section 8 tenants are very respectful towards landlords and they take care of the property accordingly. Keeping their Section 8 voucher is very important and those are conditions they must fulfill.



  • As a landlord on the Section 8, you will be in the middle of a highly demanded program. Not many landlords go Section 8 yet and that gives you an advantage.

     

  • If you put your rental property on a Section 8 listing, your vacancy rate will be very low. Some of the tenants spend over 6 months searching for appropriate rentals. Due to a high demand, tenants will be waiting to rent your property all the time.

     

  • Section 8 Program is direct and straightforward. As a landlord, all you need to do is follow the clear steps of the Section 8 Guidelines.

     

  • Most Section 8 tenants always leave the property in a good condition after moving out. They don’t want to risk losing their housing choice voucher program or dealing with landlords after.

     

  • Your Section 8 tenants will not simply move out or break the lease unexpectedly. The tenants must stay until the lease ends.

     

Disadvantage of Becoming a Section 8 Landlord

  • You must strictly follow the rules of the Section 8 Program.

     

  • Your property must pass the home inspection.

     

  • Your property must have fully-functioning electric and water must be turned on during the housing inspection period.

     

  • It tends to get difficult to get in touch with the Section 8 housing authority. They do not always answer the phone and it takes time to get their email response.

     

  • All the work from Section 8 Housing Authority is quite slow.

     

  • After your Section 8 tenant moves in, it may take up to 5 months to get the first payment for your rental property. In those cases, they pay a lump-sum check, combining the first few months and then monthly payments after that.

     

  • Usually, landlords can charge late fees if the tenants pay the rent late. However, if you go Section 8 Program, you cannot charge the Section 8 housing authority any late fees.

     

  • The Section 8 tenants are usually people with low income. That is why they opt for low income housing. Some of them are not working, some are families with many children, single moms, etc.

     

  • Most tenants who go Section 8 do not have a full security deposit. You will need to negotiate the deposit with them. This may be done by splitting the deposit into monthly payments or negotiating a lower security deposit than you would normally charge. Section 8 housing authority does not pay the deposit for the tenant. Sometimes they assist tenants in the deposit base but rarely they do pay the deposit.

     

  • The communication with the home inspection tends to get confusing. Usually, the inspector will let you know about the date they will visit you by email or a call. The inspectors usually give the format example like: Monday, from 9:00AM to 5:00PM, without telling you the exact time of the visit.

     

  • The home inspection is very strict and sometimes may notice problems even where you don’t see any issue. For example, everything could look good at your property but if only one outlet is not working, your house might fail the inspection. Even if you fix that outlet the same day, you must wait for up to a week for another visit from the inspector, so you can pass the inspection.

     

  • By the end of the year, the Section 8 housing authority will send you a 1099 tax form. You must file your income tax 100% correctly or the IRS will contact you.

     

  • If you go to the Section 8 housing authority office, you can try to inform yourself at the front desk. However, the representative will usually give you a brief and general answer to your questions. If you want to speak to the manager or caseworker directly, it won’t be so easy to meet them personally. Set up an appointment if you would prefer personal contact with someone.

     

  • There are many Section 8 housing authority offices in the US. While all of them have their own operational methodologies, the core of Section 8 is the same. I am sure that if you decide to rent your property via Section 8, you may experience problems with your first or second unit. That is the main reasons why not many landlords go Section 8, even knowing that the rent is secure. Many landlords don’t want to deal with the whole Section 8 Program nor Section 8 tenants. These landlords also refuse to take the time to research the program in-depth.

     

     

Guide to Turning Your Regular Rental into a Section 8 Rental

During 15 years of my experience as a landlord in the Section 8 Program, I learned many techniques and tested different experiments in Section 8. As an expert landlord, I will share all my tips and experiments with you. From posting the Section 8 listing to contacting Section 8 tenants and screening the tenants afterward, this guide will help you get the best out of your rental property.

 

The first thing you need to do is sign up for the landlord account by clicking here. Next, you will be able to post the Section 8 listing and allow the Section 8 tenants to see your rental property. You can also search for a Section 8 tenant and read his/her profile on the website. In addition, you can contact the tenant directly if you think that tenant profile is a match with your vacancy. The tenant will be able to see your property on-site and contact you.

 

After getting in touch with tenants by email, telephone call or any other medium, you and the tenant can set up a time to meet at the property. The tenants will see your property and you can negotiate the terms of the rental.

 

 

Here are some tips:

  • If the tenant wants to rent your place, ask them to fill out the application. In addition, you can ask the tenants some questions, such as:

How long have you been looking for a property?

How long have you been in the Section 8 Program?

What is your rental history in the last 5 to 10 years?

Why did you move out from the properties you rented in the past?

For how long would you like to rent my property?

How many people there are in your family?

What are the ages and genders of your family members?

Important question: How much is your monthly rent portion?

If the tenant responds that their monthly rent portion is equal to zero, it means that the Section 8 housing authority will pay the whole rent amount. It also means that the tenant’s monthly income is very low. On the other hand, if the tenant responds that their monthly rent is around $300, you will suppose that their monthly income is around $1,000; because the tenant needs to pay 30% of the rent from the family income.

 

  • After the tenant fills out the application, tell them that you will give the document to the manager for a review. If the manager approves the application, either you or the manager must contact the tenant within a week.

     

  • Tell the tenant that in case they don’t hear from you in around a week, they should proceed to look for a new property and wish them the best of luck.

     

  • Don’t tell the tenant that it’s you who will make the final decision.

     

  • Take some important notes and write them on the back of each application so you can remember the situation of each tenant application.

     

  • Repeat the process with 5, 6, or more applications. Then, consider all of them carefully and choose the right tenant for your property.

     

  • Since most Section 8 tenants have a good background, I suggest you still to do some screening of your prospective tenant. That way you will ensure the way your tenant lives clean and untroubled.

     

Let’s assume you collected 5 or 6 applications and you are picking the adequate applicant so you can do some screening.

 

  • After you selected the best application, take the home address from the application and visit the applicant.

     

  • Once you arrive, knock on the door. The tenant may be very surprised to see you.

     

  • Ask the tenant if you can come in and have a conversation.

     

  • When you get inside the house, tell the tenant that some parts of the application are missing, or you cannot read some words. You can also bring another short form and ask the tenant to fill it out. Keep in mind that this is just an excuse for you to come in the tenant’s home.

     

  • While tenant is filling out the form, look around the house. You can ask the tenant if you can use the restroom and use that chance to see more of the property. After you come back and sit with the tenant again, consider your screening complete. If you like the way your potential tenant lives, if the property is clean and you feel you can trust them with your property, you can continue with the conversation. You can discuss the terms of the lease, moving in or out, the deposit, etc.

     

  • If you made the decision rent to this tenant, you can ask the tenant to give you the Section 8 voucher paperwork and some form of deposit. Make sure you collect some or all the deposit before working on filling out the section 8 paperwork voucher.

     

  • In case you don’t like the way the tenant lives or they don’t let you inside the house, ask them fill out the form or fix something on his application. Collect all the papers and tell the applicants that you will let the manager revise the application. That way, you won’t hurt anyone’s feelings.

     

  • If the first applicant didn’t meet your requirements, you can do the same with the next potential tenant. Repeat the process until you find the right Section 8 tenant for your vacancy.



My suggestion is to break down the security deposit into 3 payments:

  • First Deposit: Before your work on the paperwork. That way you will confirm the deal between you two. If you don’t collect the first security deposit, the tenant may remove themselves from the deal and you will lose all the time working on his paperwork.

     

  • Second Deposit: After the unit passes the home inspection.

     

  • Third Deposit: After the tenant moves in. You don’t need to have a specific date for the last security deposit. Tell your tenant something along the lines of, “You can pay the last security deposit after you catch up with all the bills or whenever seems convenient for you to collect the money”. Keep in mind that moving in takes a lot of money from your tenant. They need money to turn on all the utilities, perhaps buy some necessities for the house, etc.



Here are some tips to fill out the Section 8 voucher paperwork and turn it to the Section 8 office:

  • Read every part of the paper carefully. Fill out every space, without leaving any blank.

     

  • Ensure your contact number and email address are correct.

     

Ensure your property is registered as a rental with your county. In case you registered it right before filling in the paper forms, attach the record with the paperwork. It takes time to update the database sometimes and Section 8 searches through this database, so they might not be see that your property is registered as rental. The report you attach will confirm that you did.

 

Some cities might have different systems so contact the County Assessor’s Office and ask them how to register your property as rental, in case you haven’t done so previously.

 

  • The Section 8 office needs the UNSIGNED contract agreement between you and the tenant. Some of the information included is the price of the monthly rent, the deposit amount, specified utility bills that the landlord pays and specified utility bills that the tenant pays, appliances, etc. They need the contract agreement without signatures, so they can review all the terms first.



  • Attach an old contract of your rental so the Section 8 staff can compare the price. For example, if the rent of your unit was $1,500 per month before, the contract you attach will serve to Section 8 office to use that amount as the rent price reference. If you own a different, similar unit then you can attach the other contract as a reference as well. Use a marker to cover the name of the tenant and other private data to protect their privacy. This step will serve the Section 8 office to compare the rent and help you get the rental price you want.

     

  • If your property is empty, my suggestion is to write the lock box code next to the question referring to your availability for home inspection. In that case, the inspector can check out the property even if you are not nearby. In addition, the inspector won’t have to contact you to set up a time. He can simply go to the property and do the home inspection. That way you will save some time.



After you complete filling out the paperwork, deliver the paperwork to the tenant. It is the tenant’s responsibility to take the paperwork to the Section 8 office.

 

Within a few weeks, the executives of the Section 8 office will contact you and let you know if the price you are requesting is acceptable or not. In case they think you should lower the price, they will make you an offer and you can negotiate the price further. Once you and the Section 8 office agree on the price, you will determine the inspection date.

 

How to Prepare for Section 8 Home Inspection

  • Your utilities (water, electricity) must be on for the inspection.

     

  • The walls and/or ceilings cannot have any holes.

     

  • The ceiling cannot have any water stains.

     

  • All doors and windows must open, close and lock properly.

     

  • The windows cannot have security bars. If the windows of your property are featuring security bars, there must be an easy way to remove them and get out in case of an emergency.

     

  • All doors must close 100%. If you see any sunlight through the door while inside the house, you must fill the gaps.

     

  • All the outlets in the house must have a reliable ground and perform properly. You can buy an outlet ground tester for as cheap as $10.

     

  • There cannot be any leaks under the sinks, washer, dishwasher and/or fridge. The toilet must flush properly, and all the light bulbs must work.

     

  • All the appliances in the house must work, including the garbage disposal (if applicable to the property). The only appliance that doesn’t necessarily need to work is the dishwasher; just unplug the power cable and use the dishwasher for storage purposes.

     

  • All the fans in the house must work.

     

  • The hot water heater must work. The water heater pressure valve must be copper pipe. All the connections of the pressure valve and copper pipe must be installed in 90 and 180° angle.

     

  • The A/C must work properly.

     

  • There must be a working smoke detector. The sound of the smoke detector must be loud enough to wake up the tenant in the bedroom in case of an emergency.

     

  • Do a safety check.

     

  • In case your property has a pool, the pool must have a gate with a lock. Section 8 has strict rules regarding the pools at home.

     

  • The stove must work properly.

     

  • The flooring/tiles must be safe.

     

  • An empty home is better for the home inspection. If you have furniture inside the house, move it away from the walls so the inspector can walk around and test the outlets.

     

  • Each bedroom must be at least 70 square feet; the bedroom must have a window or door that tenants can use to get out in case of an emergency. The bedroom must have a closet and the door.

     

  • The bathroom must have exhaust fans or a small window.

     

     

Tips to help you save money and make the home inspection easily:

  • Replace all the ceiling fans with lights. The fans break down sooner or later while the lights last longer and are easier to replace.

     

  • Remove the washer and dryer. The tenants should buy these appliances for themselves. If a washer or a dryer break down, their repair is very expensive. In case you want to keep the washer and dryer in the house, warn the tenants that they must repair these appliances themselves if they break down.

     

  • If you don’t have any ceiling fans, washing machine or a drying machine, the Section 8 home inspection will be easier.

     

  • As previously mentioned, I highly advise you to write the lock box code in paperwork that you turn in to the Section 8 office. That way, the inspector will simply come to your rental property, inspect and leave; you don’t need to keep him company.

     

  • In addition, if the house is vacant most of the time, I suggest you leave the radio or some lights on. That way, people that walk by will think that somebody lives in the house. You will avoid unnecessary trouble or theft attempts that way.

     

  • If your property fails the home inspection, fix the problems they found and invite the inspectors again. After you pass the inspection, you and the tenant can sign the contract. Give the tenant the key of the property and turn in the lease to the Section 8 office.

     

  • Your rental contract should contain the information about the lease term; the starting date of the lease is the date the property passed home inspection or any date after the unit passed inspection.

     

  • State in the contract which utilities a landlord (you) pays and which utilities the tenant pays; the monthly price of the rate; the deposit amount.

     

     

After Your Unit Passes the Home Inspection

  • Collect the second deposit from your tenant and deliver the key to the tenant. While in the property, walk through the unit and do the check list; take a few photos of the house in the current condition and keep them in your phone/camera.

     

  • At this point, you and your tenant must sign the rental contract. Give the copy of the contract to the tenant and send another copy to the Section 8 office.

     

  • After a few weeks, the Section 8 office will reach out to you and ask you to sign their contract, called HAP (Housing Assistance Payments) Contract. Usually, the Section 8 office sends the HAP contract by email or mails it to you.

     

  • Sign the HAP contract and take it back to the Section 8 office. You must take the original contract with your signature to the office. Make a copy of the paperwork for your records.

     

  • After turning in the HAP contract, you will almost complete the rental process of the Section 8 Program.

     

  • For example, if the total rental price is $1,000 and the tenant only pays $50, the Section 8 Program will pay the other $950.

     

  • Section 8 office works slowly. You might have to wait up to 5 months for the first rental payment from the Section 8 office.

     

  • Example: If the monthly rental price the Section 8 office must pay to you is $950, you will receive $950 x 5 = $4,750 in five months, if that’s when they cut the first check. After the first check, you will receive $950 a month regularly.

     

     

How to Deal with Section 8 Tenants After They Move In

It is possible that your tenant won’t like something about the unit after they move in. That could be a noisy A/C, the window blind or something else. In that case, the tenant might ask you to do something that will cost you some money.

 

Tips on how to make your tenant happy without costing you anything:

  • The tenant still owes you the third deposit. Ask them to lower their third deposit by some percentage (e.g. 50%) and they will surely accept.

     

  • When you lower the third deposit by 50%, the tenant will still owe you the other 50%. Usually, I just remind the tenants that they owe me the deposit; if they pay, I will take it. If they don’t pay the rest, that’s okay too. The point is that the tenant keeps in mind he owes you something. That way, they will not bother you a lot or complain about some minor repairs.

     

  • After the tenant spends around 9 months in the property, you should go for a little revision. After you check the property and you don’t like its current condition, you can tell the tenant to start looking for a new property. At that point, the leasing period will end in 3 months and that’s enough for both of you to separate properly.

     

  • If you like the condition of your property, you can renew the lease or increase the rent.

     

  • Contact the Section 8 office to inform yourself about the increase of the rent price. They will teach you how to raise the rent. Do any necessary research 3or 4 months before the end of the lease. Sometimes the Section 8 office requires an increase request a few months before the contract ends.

     

  • Remember that the Section 8 inspector will visit your property every year to re-inspect. Ensure your tenant is at home at the specified date of inspection. If the unit fails the home inspection, you can fix the points the inspector indicated and request a re-inspection.



I just shared with you all my knowledge on how to rent a property via Section 8 Program. All the points listed above come from my experience as a landlord. However, these ideals change from time to time and Section 8 doesn’t work the same in every city. For that reason, I recommend you do some research before turning your property into a Section 8 listing.

 

 

How to do effective research on the Section 8 Program:

  • Go to the Section 8 office in your city. Ask the representative everything you need to know before you go Section 8. Ask for detailed steps on how to turn your property into a Section 8 rental.

     

  • Visit the official website of the Section 8 office in your city; inform yourself from the website as much as you can.

     

  • Connect to other landlords in your area. It is highly beneficial to connect with landlords in the Section 8 Program. These landlords should be currently active in the Section 8 Program because they will tell you the latest rules and requirements. If the landlord was in the Section 8 Program 10 years ago, they won’t have the updated information.

     

  • Build a good relationship with people from the Section 8 office.

     

When you understand and master the Section 8 Program in your city, you may find that you like it and go Section 8. That way, you will enjoy your life with no headaches and no worrying about possible evictions. Most importantly, you will certainly get the rental payment at the end of every month.