The apartment complex you inherited makes you an influential participant in the economic recovery of the nation.
Guest post by Sabrina Ames.
Property owners, rental agencies, renters and the service providers who keep apartments and rental homes in good repair contribute over one trillion dollars to the economy annually, according to the National Multi Housing Council.
Screening applicants to fill the vacancies in your inherited apartment complex begins with prospective tenant interviews.
According to SFGate.com Home Guides, in order to spot a prospective bad tenant, the screening should include:
- Social Security Numbers and driver’s license number;
- Credit report;
- References from previous property managers;
- Current employment status.
Organizations like the American Apartment Owners Association (AAOA) offer articles, resources and support for apartment managers in all stages of the career.
Accepting Housing Choice Vouchers
One question you must answer is whether you plan to accept HUD Section 8. As the heir to an apartment complex, you should make that decision based on your feelings about the program and the additional work HUD requires when qualifying a rental property. Section 8 helps low-income families by subsidizing a portion of the rent they pay each month. The Department of Housing Development (HUD) provides federal funds to local public housing agents (PHAs), which then provide housing choice vouchers to qualified applicants.
To qualify for the housing choice voucher, PHAs verify an applicant’s income and require that:
- At least one adult works full-time;
- There are no drug related convictions;
- All minor children attend school;
- At least one referral be provided from a previous or current landlord.
The county-based PHA determines who qualifies for the program. Once a family reaches the top of a waiting list, they receive a voucher. They must find a home within a specific amount of time or lose the voucher and be put back on the list. The PHA and property owner sign a contract which provides that the largest portion of rent will be provided by the program and the renter will pay the difference. The tenant and property owner/manager also sign a rental contract to ensure the tenant understands the rules and policies set by the owner/manager.
Advantages of Section 8
According to SFGate.com, property owners who accept Section 8 tenants do so because:
- HUD pays 70-percent of the rent each month;
- PHAs require that Section 8 applicants meet strict criteria;
- Tenants must comply with the rules or lose their voucher;
- Annual inspections by the PHA guarantee upkeep of your property.
The housing choice voucher does not pay for any security deposits so the tenant must pay all deposits out-of-pocket. Also, while the PHA does a background check, you will need to do one as well. Property owners do not participate in the program because:
- The increase in paperwork;
- It is harder to evict section 8 tenants;
- Yearly inspections and more paperwork;
- It takes up to 60-days to receive the first month’s rent payment.
Just a head’s up, finalizing of Section 8 paperwork could delay receipt of your first rental payment.
About our Guest Author: Originally from Denver, Sabrina Ames is a property manager of a quaint townhouse community where she resides with her dog Steve.