Screening Section 8 Tenants

 

by Janet Tonkins • “The Baltimore Real Estate Diva”

As a landlord, if you have not worked with Section 8 before, it can seem a little overwhelming. A common question is “How do I screen Section 8 Tenants”.  That is  pretty simple.  You screen Section 8 tenants just like you do those that do not have subsidized rent, with a couple changes. I realize that this is a very basic tenet, but when times are rough or when we have a property that has been vacant for quite some time, we don’t always follow it. The reason we screen tenants is to ensure that we, as landlords, will be paid, and that our property will not be damaged or destroyed.

• Most Section 8 tenants have to pay a small percentage of their rent (10-25%).  A few have their entire rent paid by the government.  Consequently, the tenant needs to have some other source of income.  Find out how much they are currently paying towards their rent?  Where are they going to get the $100-250 per month that they have to pay out of their pocket? Think about whether or not you want to accept someone who has to pay more than $250.00 towards their rent. Plus, how are they going to pay for utilities, if they are not included in the rent?  Weigh your decision heavily on the fact  that a large portion of the rent is guaranteed  from the government, but be concerned about the remainder.
• If their credit is bad or non-existent, confirm that they have income to pay their portion of the rent.
• I pre-screen them in advance by asking them why they are moving and if they have the RFTA (Request for Tenant Approval) in hand, which authorizes them to move.  I give them my criteria: must pass credit, background, criminal, eviction, and sex offender check, must be neat,   clean and responsible and I must visit your location before I will approve you for my unit. If they say no problem I Confirm they are able to pay the Security deposit upon move-in.  They may need to go to emergency assistance to get the deposit, so have them get a letter to confirm the subsidy. I will give them a promissory note or installments if they have at least 75% of the deposit if everything passes.

The most important things to look at when screening tenants are:

• Credit Report – Does the applicant have many of their accounts overdue? Do they pay their bills on time? This is a good indication of whether or not they will pay rent on time as well. Most of them will have low credit scores.
• Rental history – Contact previous landlords. Why did the tenant move? Did they damage the property? Did they pay rent on time? Were they “problem” tenants?
• Criminal history – Are there Drug cases, Judgements, armed robberies or other  violent cases on the report (Maryland Judiciary Case Search) http://casesearch.courts.state.md.us/
• Eviction Check - Some of them will tell you up front if they have been evicted.
• Section 8 Caseworker – You can find out  from the caseworker whether or not this is a good applicant.

You don’t have to take the first tenant that applies. I’ve gone through periods where some of my units have gone months without being occupied until I could get the right tenant. There were some applications, but I turned them down after screening them. Why? These tenants would have resulted in more work for me and my attorney.  Remember you are in this business to Make money not Lose money!