In episode 16 of the Profitable Powerhouse Properties Podcast, your hosts Jonathan Cook and Bryan Jenkins interview Charlene Minor from Bailey & Hunter LLC, and Joe Levio, AHI Properties’ Leasing Manager in Oklahoma City. They discuss the vetting process of Section 8 tenants, potential benefits to participating in the program, and more.
Episode Highlights:
- You can have the best property out there, but if it doesn’t have tenants, you aren’t going to make any money.
- 80% of Charlene’s portfolio involves housing vouchers.
- Every housing authority is going to have different requirements for tenant approval.
- With Section 8 tenants, you can’t charge more than one month rent for a security deposit, and you can’t charge extra fees.
- One big objection to Section 8 tenants by property managers is a perceived inability to get a tenant out if they violate the lease.
- There are a lot of misconceptions and generalizations people make about Section 8 tenants that are incorrect and harmful, like assuming they are more likely not to pay their rent on time.
- Charlene does a home check for Section 8 tenants in their current home to assess cleanliness, pet screenings, whether they have a car, etc.
- There may be slightly higher cost up front to approving a Section 8 tenant, but that money is made up by the longevity of that tenant in the property.
- If your voucher tenant has failed their inspection, they have to complete any repairs they’re responsible for within a certain amount of time or they’re removed from the voucher program.
- In some cities, if the landlord doesn’t complete repairs they’re responsible for within a certain timeframe, then the tenant’s rent can be abated.
- Often, you can get higher than market value rent from Housing Authority tenants.
- Whether your tenant is a Section 8 tenant or not, you should know who they are so that you don’t expect, for example, an elderly person to crawl into a loft to change an air filter.
- It can take the housing authority a couple of months to make banking transitions if you make changes.
- Certain investors will find participating in the voucher program particularly beneficial.
3 Key Points:
- The tenant approval process for Section 8 tenants is similar to an average tenant.
- There are protections in place for property managers and landlords with Section 8 tenants.
- Working with the housing authority and Section 8 tenants is not as scary as it seems.
Tweetable Quotes:
- “Just like with any other investment, with real estate we always recommend you have a reserve available for those big items. The big ticket item I mentioned was the septic, that’s several thousand dollars.” –Joe Levio [I think]
- “The Atlanta housing authority is desperate for houses because they have so many people with vouchers & not enough landlords participating. So they’re offering much higher rents, they’re offering leasing incentives… they’re doing everything possible.” –Charlene Minor
- “It’s all about treating the tenant well and trying to understand the tenant. Like Charlene said, you’ve got to know your tenant. It can’t be a blanket ‘all tenants are the same.’ No they’re not!” –Jonathan Cook
Resources Mentioned:
- Check out our website ahiproperties.com
- Check out Birmingham Insurance Group online or call them at (205) 616-1107
- Buy, sell, and own investment properties the way the pros do it with www.roofstock.com
- Email Jonathan and Bryan at Podcast@AHIProperties.com
- Charlene Minor Contact Info:
- Phone: 770-912-6496
- Email: Charlene@baileyandhunter.com