Disadvantages Of Renting To A Section 8 Tenant

The Section 8 Voucher Program is a tenant-oriented rental assistance program offering subsidized housing for low-income tenants. The main advantage the program offers for landlords is that the program pays the landlord directly for most of the rent charged to the tenant on a monthly basis. There are, however, several unique challenges faced by landlords who decide to participate in the program. Here is a brief summary of some of the major disadvantages confronting landlords who rent to Section 8 tenants.

No Security Deposit Payments

The Section 8 program offers housing vouchers for payment of the monthly rent on behalf of the tenant, but these vouchers don’t include security deposit amount payments landlords would typically require from other tenants. A landlord can seek the security deposit directly from the tenant, but this can be difficult when considering the tenant’s limited resources to cover such a payment. Usually, the renters already have income issues, which is why they were deemed eligible for the Section 8 voucher program in the first place.

Damages to the Property

Another big disadvantage of renting to tenants with Section 8 vouchers arises from the fact that Section 8 tenants are notorious for being very reckless and careless about the condition of the property and seldom attempt to maintain it. This is likely because Section 8 tenants have very little “invested” in the property, since the Voucher program typically covers the lion’s share of the rent payments and Section 8 tenants usually do not have the resources necessary to maintain the property in good condition. This reality underscores the importance of requiring payment of a security deposit at the inception of the landlord-tenant relationship. Equally important is your diligence in screening the applicant at the beginning of the relationship.

Delay In Receiving Initial Rent Payments

Under Section 8, landlords do not receive payment by the Section 8 office until after the tenant has moved into the rental unit. As a result of administrative delays and agency backups when processing applications, landlords may not receive their initial scheduled payments from the office until months after the tenant moves in. This can create potentially significant cash flow problems for participating landlords. Once the case is set up in the Section 8 system, payments will eventually be made in a timely manner each month. But until then, landlords will have to shoulder the financial burden caused by initial delays in receiving monthly rental payments.

Annual Inspections Under the Section 8 Program

The Section 8 Program requires an inspector to inspect the property at least once a year, regardless of whether it is rented out or not. The purpose behind the inspection is to ensure that the property meets HUD’s Housing Quality Standards. The inspector will observe several different aspects of the rental unit to determine whether it complies with applicable rules, including the sanitary system, electricity system, water and sewage, use of lead-based paint and smoke detectors. For some landlords, the inspection process could cause headaches, depending on whether they have maintained the house in a condition that the Housing Authority will accept as compliant with the Section 8 Program. If you fail the inspection, you will be provided a list containing information about the areas or items that need fixing and a reasonable time to complete the tasks. When all the issues are addressed, you must ask for re-inspection to determine whether the issues have been resolved to the inspector’s satisfaction.

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