I realize that I owe you a post on "when to pull the plug on a flip" and I should also be continuing the series on "our properties" but I have to get a little off schedule just for a moment. A situation arose today with one of our rentals that demands that I write a post that takes me in a slightly different direction. I'm sure you gathered from the title that I'm talking about a section 8 tenants. If you are not familiar with the term a section 8 tenant is a person who for one reason or another is recieving financial aid from the city to obtain housing. In most cases the majority if not all of their rent is being paid by the city.
We had always been a little nervous in the past about renting to tenants with housing vouchers mostly because of the stereotypes that these folks tend to fall victim to. They will tear up your property being the big one. I am certainly not being judgemental of anyone who is down on their luck but a damaged property equals a vacant property and a vacant property is...well...not good. However after we had a tenant completley trash one of our rentals who was not section 8 we determined that A. It wasn't fair to assume that because someone needs housing assistance that they will destroy your home and B. You run the risk of the property getting trashed regardless. So, for the first time we offered one of our rentals to a tenant using a housing voucher. Here is what we have learned from the experience thus far...
1. NEVER, NEVER, NEVER let a section 8 tenant move into your rental before the housing authority has given you a written contract stating that they approve the home. Sounds like common sense right? Well, it was a dumb mistake that we made that I discussed in our post on PROPERTY MANAGEMENT MISTAKES. We are still paying for that error. The tenant moved in at the end of March and we have yet to receive our first payment from the housing authority. Lame.
2. The one very positive side to renting to section 8 tenants is that your rent payment (once it gets started) is guaranteed. No pacing back and forth in front of your mail box hoping that rent check will some how magically appear.
3.Another strong positive to renting to section 8 tenants is that the housing department will conduct an inspection of the property once per year. Since we have not had our tenant that long yet, I am not sure how thorough or intense the inspection is but never the less there is an inspection so I can only assume things can't get too bad.
4. As we learned today you may not always have as direct of a line of communication with the housing office as you would like. We have called and left messages several times to confirm that the process was moving along and that we should expect payment shortly but we never receive return calls. Then today we received the contract and the front page of it had the correct tenant's name but wrong property address and rent payment. So of course Andrew called (at 2:30 on a Friday) and a message came on that said "We are currently closed, please call back between 8 and 5 Monday through Friday...go figure.
So there you have it. We are hoping that this person will be a long term tenant and we will be able to depend on that rent payment coming in like clock work on the first of every month but I will defintely keep you posted!