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Screening the Section 8 Tenant
| | Tuesday, June 08, 2004 @ 08:00 AM EDT
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Contributed by: laurie ann waltz
laurie ann waltz Properties
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I can only write about, give advise about, and know about the area in which I live and I do investing. I have been an investor in the Pgh area since 1988 when I purchaed my first duplex at the age of 23. I rent primarily to the Section 8 Tenant. The following are a few facts about my renting techniques.
In Pittsburgh, it's a landlords market in the Section 8 arena. The city has an unmet demand for Section 8 housing. In fact, more than
600 families hold section 8 vouchers to help them with their rent, but cannot find places to live. Waiting to receive vouchers are 1400 more families.
Simply put, there are not enough Section 8 landlords in the city to meet the demand. With rents ranging from $450.00 for a one-bedroom units to $695.00 for some three-bedroom units, the return on investment couldn't be better.
So why don't more investors and property managers enter the Section 8 market? Simple. While there are plenty of good tenants who will treat your property well, Section 8 can also be a magnet for drugs and crime. Along with drugs and crime comes poor care of your property as well as civil and criminal actions, which can prevent you from just "moving on" and getting another tenant into the property.
The key is to have a system whereby to screen the prospective tenant before you hand over the keys. This is one market where a credit report alone is not going to be an effective tool in screening your tenant. This is because of the nature of Section 8 subsidies and the fact that most low-income applicants are going to have poor to no credit.
A more effective tool in screening Section 8 Tenants is to take a hard look at their application. Is the applicant intentionally witholding information? If so, why? Will this tenant take good care of my property and stay for the long term? Does this tenant exhibit maturity and stability? Who are the tenants associates? Is there a criminal history involved?
A PRS professional (Public Record Search) company can answer these questions for you, often within a matter of hours. The information provided by most Reputable PRS Companies are: Confirmation of applicant's current address, any known and verified addresses where the applicant has lived for the last 20 years, and verification of the applicant's date of birth and social security number.
In addition to the above, a comprehensive report will include all known neighbors living next to the applicant's current address, which is great for verifying stabilty and responcibility of the applicant. Additional services a PRS company can provide is the name, address and telephone number of the applicant's past landlord/property owner, as well as information pertaining to the applicant's associates and roommates. A check of the applicant's criminal history, as well as their associates, should also be a part of your screening equation.
The right PRS company can help you find the "right" tenant in order to make the Section 8 rental investment a success.
I reccommend using a PRS Comapny to all new investors who want to get into Section 8 rentals.
Laurie Ann Waltz
President
Nu Image Real Estate & development, Inc.
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