Non-Payment of Security Deposit by Section 8
The Section 8 program provides housing vouchers that help pay the monthly rent for tenants. Tenants typically pay up to 30% of their adjusted monthly income, while the government covers the rest. However, the program does not cover the security deposit. It can be challenging to collect a security deposit from a Section 8 tenant who has a low income and may not be able to afford it on their own.
Frequent Inspections by Section 8
Not being able to collect rent before the tenant moves in can be an issue if you are unable to cover the mortgage without collecting rent right away. If you can wait a few months, you will start receiving monthly rent payments from the Department of Housing and Urban Development regularly for the duration of the tenant’s stay.
Non-Section 8 Tenants May Not Want to Live in the Property
If you open your property to Section 8 tenants, you may find that tenants who pay full rent are hesitant to move in. Some tenants may associate Section 8 housing with rundown properties or have negative perceptions of their low-income neighbors.
Section 8 Sets the Rent Amount
Renting properties to Section 8 tenants may have another disadvantage regarding the rental price. The program will only pay 90% to 110% of the fair market rent for your property and area, as determined by the Department of Housing and Urban Development. For example, if the Department of Housing and Urban Development determines that the fair market rent for a two-bedroom unit in your building is $800 per month, you would need to rent it for that amount or less.
More Restrictions on Evicting Tenants
If the rental agreement is not going well, you may face greater difficulty evicting a Section 8 tenant compared to a full-paying tenant due to regulations set by the local housing authority. While eviction procedures must always comply with local and state laws, they require additional documentation for Section 8 tenants.
Frequently Asked Questions
Does Section 8 pay rent for the first month?
The Section 8 program makes monthly rent payments, but the first payment is only sent after the tenant moves in. Once the first payment is sent, landlords can expect regular monthly payments thereafter.
Can Section 8 tenants pay an amount greater than the voucher value?
Section 8 tenants can pay a higher percentage of their income if the rent exceeds the voucher value. Generally, tenants should not pay more than 30% of their adjusted income. In the case of a more expensive unit, tenants may pay up to 40% of their adjusted income.
What is the Section 8 program?
The Section 8 program, also known as the Housing Choice Voucher Program, is a rent assistance program funded by the U.S. Department of Housing and Urban Development. The program provides vouchers for low-income individuals and families, individuals with disabilities, and elderly Americans to assist in covering the cost of rent in approved properties.
Source: https://www.thebalancemoney.com/renting-to-section-8-tenants-disadvantages-2124975
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