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Should I Accept Section 8 Tenants—Or Run the Other Way?

After dealing with Section 8 for almost 20 years, we can attest that it’s not nearly as bad as the gurus make it out to be. The Bad News Section 8 requires a lot of work—specifically, you have to deal with Section 8 applicants who never seem to understand the program, even after being on it for years. The Upside If you can handle the paperwork and have a good followup reminder system, the extra time and effort can pay off, with government payments coming in like clockwork. If you screen the applicants correctly, you can also avoid some of the pitfalls associated with Section 8. For the record, the (most important) “right question” is, “What is the HUD-determined Fair Market Rent (FMR) for a unit with ‘X’ bedrooms in my area?” The answers are available here—if the applicant wants to pay more than the FMR, they’ll have to make up the difference, and either way, they’ll pay 30% of their monthly income as rent, with Section 8 paying the difference between that amount and the FMR. But because Section 8 only covers 70% of the TCH up to $911, the most it can contribute is $638, meaning that regardless of their income, the tenant must pay the remaining $393. Filling out the forms and waiting for them to call you back is the easy part—the hard part is dealing with the Housing Quality Standards (HQS) inspections that happen every year. Here’s the short version: All windows must be present and undamaged; ground floor windows must have working locks. The floor, walls, and ceilings must not have any serious defects such as would indicate structural problems or present a danger to the tenants. What’s more, these inspections happen whether the property has a tenant in it or not, and the inspectors don’t particularly care if a particular problem was caused by the tenant or not—you still have to deal with it, and fast.

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