Help! What Is Section 8?

So here I was just talking along about a property thinking everyone on Earth knew what Section 8 was.  So a prospective buyer stops me and says “What exactly is Section 8?  How does it work?”

Editors note:  That’s not exactly how it happened.  But what the heck?

Section 8 is a cover-all term for the different housing authorities around this great nation.  When someone calls you and asks if you will accept Section 8 what they are saying is “Hey, I have a housing voucher from XYZ Housing Authority and will you take payment from them rather than me?”

A housing voucher is simply the amount of money any given housing authority will pay towards a tenant’s rental fees.  For instance, the housing authority could say that this single mother of two is entitled to a three bedroom house up to $725/mo.  The HA can, based on her income and expenses, choose to pay any or all of that amount.  The voucher could be for all $725.  In that case your entire check comes from them.  If the voucher is for $615 then you’ll need to be reasonably assured that the tenant can pay the other $110 each and every month.

Now let’s go through the positives;

• You know your check from the housing authority will be in the mail, like clock work, each month at the same time.  Some even have direct deposit. 
• Yearly inspections will help to discipline you to keep your rental in good condition.

Now let’s talk about some of the negatives;

• Depending on how much the voucher is for the tenant may feel little to no personal responsibility for the care of your rental home.
• Housing authorities do not provide deposit money.  If you are going to require a deposit (let’s hope you do) you will need to get that from the tenant.  I suggest cash.
• Yearly inspections can be a bit tedious, depending on the housing authority.  Most are reasonable.  Some a pain in the butt.

There really is no right or wrong answer as to whether or not you should accept tenants that are on the various Section 8 programs.  Some of my clients love the program.  Others avoid it like the plague.  Maybe because they’ve had previously bad experiences or maybe just fear of the unknown.

Personally, I’ve taken housing vouchers in the past and would do so again.  Just because you are taking a voucher doesn’t, or shouldn’t, keep you from doing background checks, credit checks, sexual predator checks, etc.  You still need to make sure that prospective tenant is someone you want in your house.  Based on Equal Housing Opportunity laws, of course.

If you enjoy reading about property management issues I might point out the new link on the right column to The Successful Landlord Blog.  I read it periodically and it’s a good read.   Though you had better like sarcasm.  🙂