As a landlord for section 8 tenants, you receive a check from the government every single month that covers at least half of your tenant's rent. The benefits of this are a no-brainer because you can charge above-market rates and it is still cheaper for your tenant to live in your property.
Does anyone here have experience renting to section 8 tenants? What is the process like? How have you screened your applicants? Any challenges? What are the risks, and what are the positives? Have you ever had any issues?
This isn't an accurate description of the Section 8 program. You receive a check for the difference between the charged rent and whatever 30% of your tenant's income is. If the tenant can afford to pay $500/mo and the rent is $600, Section 8 only pays $100. The tenant should be income certifying every year to adjust that split.
You are also capped on the rents you can charge, as Section 8 won't pay "anything". You tend to get better rents than you would otherwise, because "market" rent is a bit amorphous and with the assistance, your tenant can often pay to a higher comped rent than otherwise (and certainly other than what they could afford unassisted).
That being said, there is an an entire sub-market to MF that deals with Section 8 and affordable housing, so there are a lot of complicating factors both positive and negative.
I think every situation is different and it depends on what the current rental rate on the apartment is, and what the market rental rate is for comparable apartments in that specific area.
I have a Section 8 (HUD) tenant. The tenant was residing in the apartment before being approved onto the Section 8 housing voucher program. Her rent was $675/month. She had some health issues and was approved by Section 8 almost a year after applying. After approved, I negotiated with Section 8 and the rent is now $850/month with Section 8 covering $600 of the total rental amount. The tenant now pays $250/month for her portion of the rent which is a little more than a 1/3 of what she used to pay prior to being on Section 8.
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Ahh okay. If the tenant could afford $500 and rent was $600 I have a hard time believing that person would be on section 8 though? Wouldn’t that split be somewhere closer to half, realistically?
I mean, that's a complete hypothetical. But why wouldn't they be on Section 8? That's a free $1,200 a year towards housing, and if you are so rent burdened that $500/mo represents 30% of your monthly income, that isn't money you can easily afford.
You are right that often the splits are more "equitable," but it's also easy to imagine, say, a senior on a fixed income who can afford only a couple hundred dollars a month (though there are other programs for seniors so it isn't a perfect case study). The other aspect of it is that maybe I applied for, and got, a Sec8 voucher when I was making 30k/year, but now I am making 40k. I still qualify for the assistance, but it isn't as much. And if I give up the voucher and get laid off and find a lesser paying job, all of a sudden I'm shit out of luck
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