Screening the Section 8 Tenant
I can only write about, give advise about, and know about the area in which I live and I do investing. I have been an investor in the Pgh area since 1988 when I purchaed my first duplex at the age of 23. I rent primarily to the Section 8 Tenant. The following are a few facts about my renting techniques.
In Pittsburgh, it's a landlords market in the Section 8 arena. The city has an unmet demand for Section 8 housing. In fact, more than 600 families hold section 8 vouchers to help them with their rent, but cannot find places to live. Waiting to receive vouchers are 1400 more families.
Simply put, there are not enough Section 8 landlords in the city to meet the demand. With rents ranging from $450.00 for a one-bedroom units to $695.00 for some three-bedroom units, the return on investment couldn't be better.
So why don't more investors and property managers enter the Section 8 market? Simple. While there are plenty of good tenants who will treat your property well, Section 8 can also be a magnet for drugs and crime. Along with drugs and crime comes poor care of your property as well as civil and criminal actions, which can prevent you from just "moving on" and getting another tenant into the property.
The key is to have a system whereby to screen the prospective tenant before you hand over the keys. This is one market where a credit report alone is not going to be an effective tool in screening your tenant. This is because of the nature of Section 8 subsidies and the fact that most low-income applicants are going to have poor to no credit.
A more effective tool in screening Section 8 Tenants is to take a hard look at their application. Is the applicant intentionally witholding information? If so, why? Will this tenant take good care of my property and stay for the long term? Does this tenant exhibit maturity and stability? Who are the tenants associates? Is there a criminal history involved?
A PRS professional (Public Record Search) company can answer these questions for you, often within a matter of hours. The information provided by most Reputable PRS Companies are: Confirmation of applicant's current address, any known and verified addresses where the applicant has lived for the last 20 years, and verification of the applicant's date of birth and social security number.
In addition to the above, a comprehensive report will include all known neighbors living next to the applicant's current address, which is great for verifying stabilty and responcibility of the applicant. Additional services a PRS company can provide is the name, address and telephone number of the applicant's past landlord/property owner, as well as information pertaining to the applicant's associates and roommates. A check of the applicant's criminal history, as well as their associates, should also be a part of your screening equation.
The right PRS company can help you find the "right" tenant in order to make the Section 8 rental investment a success.
I reccommend using a PRS Comapny to all new investors who want to get into Section 8 rentals.
Laurie Ann Waltz
President
Nu Image Real Estate & Development, Inc.
Now in California's sunny clime, where I often spend my time. The care and feeding of Section 8's is on the long slide. Seems that money is tight and as is normal in a capitalist society the first to be effected are those on the bottom. If you extend and expand a system of bottom feeding there wll be a social reaction and the area will quickly be filled and over the years become an accepted life style and will be repeated onward in the generations to come.
We have among us out here in LaLa land now resident the third and fourth http://www.generation.Of those who choose not to produce or conform, yet, expect housing and checks to buy the staples plus of life.
It is my considered opinion based on a life span which started with forming the wagons into a circle to avoid contact with the locals who were defending their life estates To the newest manifestation which is now the gated estate.
We have to discontinue this form of life style. We need something better then Hub type projects. We need some sort of social intrusion to break the problem.
The solution I believe is here among you all. I think that an examination of the problem should be one of the high priorities of those of you who wish to furnish housing Perhaps a new form of background search and examination should be started at time of application for housing assistance. Then a division and sort made of the applicants so that those whose social impact is a big negative can be ordered to some reside in some form of assistent living that includes heavy social workings to adjust or remand to an institution those who cannot accept the rules and regulations of normal social groupings.
It is done in other areas of the world. In more primative societies they either command full leadership positions or are eliminated by those who conform.
Time to come up with some answers. This is one big problem.
Cheers Lucius
This is my opinion on Section 8 having setion 8 tenenats good and bad. The problem of repeated generations of section 8 tenenats is one that in my opinion is easey to solve but hard to enforce and probably would be met with heavy resistance. Cut it off. You have three or four years of assistance. At the end of that time you are off of section 8 for a period of so many years before you would even be eligible to reapply again. The reason that it is generational is that so many kids were brought up on section 8 and in section 8 housing that they don't know any different and think that if it was good enough for thier parents it is good enough for them. Now my hat is off to those people who use section 8 the way that it was meant to be used which is as a setepping stone out of a hard or life changing situation into a better way of life. I have seen many people use it as an opportunity to go back to school, get better paying jobs and the like. Anyhow, just my little tirade I suppose
Joe
In the process of screening any tenant applying to rent from you, you must have a consistent approach; don't let your guard down so that you get hit with a law suit for unfair housing practices.
I know some successfull section 8 landlords and they made sure they did not change their process: 1) they charge an application fee; 2) they ask for the telephone numbers of previous landlords-not necessarily the one they were leaving (he will say anything to get rid of this tenant) what they want to know is did the tenant pay his portion on time?, did the tenant cause any damage? were the utilities ever turned off?Find out if the tenant had more people in the unit than they were supposed to have?; 3) smart section 8 owners require an original local police report whether male or female, young or old. You can turn down applicants for previous criminal history; pay special attention to any arrests for violence or drugs even if the arrests did not result in prison terms- the landlord must provide a decent and safe housing unit and that starts with tenant selection.
As long as you subject every applicant to the same process, you will be able to defend your actions when you turn down a prospective section 8 tenant.
Because with many section 8 tenants the municipality pays most or all of the rent, many owners forget to perform monthly housing unit inspections and making sure that the tenant pays their portion by the due date. These owners know how to use and are not affraid to use the eviction process in their favor; you see a tenant who gets evicted for non payment or for causing damages to the unit can, and will, loose their section 8 assistance. So get to know attorneys who know how to use the eviction process they will save you a lot of money in the long run.
Also always have handy the telephone number of the housing inspection unit of your municipality. You can request an emergency inspection if you find damages caused by the tenant.
Lastly, you have the tool of lease renewal: make sure you give them at least 60 days notice indicating that you will not renew the lease and copy the municipality on your notice.
If the tenant is a good one and your costs are increasing, don't hesitate to ask for an increase for the lease renewal, but make sure your request is within the market rents.
larb14mia