Are there reasons why a landlord might not want to have Section 8 tenants?
Are there any reasons why I might not want to have Section 8 tenants?
Answer
Section 8 has both advantages and disadvantages. The main theoretical advantage is that the government guarantees the rent. However, in practice there are many ways in which this can become untrue. For example, if the tenant originally qualifies for 100 percent subsidy and a couple of months later the tenant qualifies for only 20 percent subsidy due to a change in financial circumstances (e.g., found a job), the landlord must depend upon the tenant for 80 percent. Furthermore, rent increases are limited and require permission of the housing agency and if the market rent (FMR) goes down the rent you’ll receive is reduced. There are circumstances where the landlord may not receive payments for certain periods of time.
You also have the same problems regarding unpaid rent and damages that you have with any other tenant because the government is not responsible for the tenant’s share of rent or what the tenant does to your property. In fact, you are less likely to collect for unpaid rent and damages beyond the amount of the security deposit than for non-Section 8 tenants because the typical Section 8 tenant has less financial resources.
The most basic disadvantage of the program is that the government gets more control of your business. There is an initial inspection, annual inspections, and inspections if the tenant complains about something. Section 8 standards are often higher than habitability laws and/or what the landlord must usually do in order to attract good tenants for the particular property.
If the tenant must be evicted it is the landlord’s problem and there will be little or no help from the agency that administers Section 8. In fact, they may terminate payments upon commencement of the eviction.
Be sure you understand the program before you get involved with Section 8 and, if you do, be sure that you select tenants using the same screening and selection standards as you would for an applicant who is not Section 8, only taking into account that Section 8 will initially be paying part of the rent.